Radix Industries (India) Ltd

BSE: 531412 | NSE:  | ISIN: INE576N01014 
Market Cap: [Rs.Cr.] 323 | Face Value: [Rs.] 10
Industry: Miscellaneous

Management Discussions
MANAGEMENT DISCUSSION

OVERVIEW:

The financial statements have been prepared in compliance with the requirements of theCompanies Act, 2013, guidelines issued by the Securities and Exchange Board of India(SEBI) and other statutory requirements. Our Management accepts responsibility for theintegrity and objectivity of these financial statements, as well as for various estimatesand judgments used therein. The estimates and judgments relating to the financialstatements have been made on a prudent and reasonable basis, so that the financialstatements reflect in a true and fair manner the form and substance of transactions andreasonably present our state of affairs, profits and cash flows for the year.

INDUSTRY STRUCTURE AND DEVELOPMENT:

ECONOMIC OVERVIEW

The revitalisation of global economy continued during the calendar year 2013 and theglobal economy ended the year on a better footing as compared to the start of the year.The growth momentum is expected to be carried forward during the year 2014. TheInternational Monetary Fund forecasts that world output will grow 3.6% in 2014, comparedto 2.9% during 2013. The US economy grew at an annual rate of 2.6% in the last quarter of2013 with better growth forecast for 2014. The UK economy strengthened steadily with GDPshowing 1.9% growth during 2013 and it is expected to maintain the revival momentumthrough 2014. Eurozone continued to show mixed signs of recovery and growth concerns.However, policy action by specific countries is expected to deliver better performanceduring 2014. While the global economic recalibration is playing out in a relativelymeasured way, global business leaders are becoming increasingly confident about thesustained economic and business growth than they were last year. Global corporations'performance and investors' confidence were reflected in the sharp movement of worldcapital markets during 2013

INDUSTRY OVERVIEW

The hair business is being seen as the fastest growing export from the Southern Indianstate of Andhra Pradesh. This bizarre export of human hair to the US, China, Europe andthe Middle East is fasting booming into a 1,500 crore ($241.857 million) industry.

The economy may be in a slump but the export of human hair is booming. As per roughestimates, over 3,000 tonnes of hair has been shipped out of the Visakhapatnam Port thisyear (2013-14).

The hair trade is swiftly turning into a growing industry and with famous Hindu Templesin South coming out with e-auction global tenders, the international buyers will enterIndian Markets.

As per estimates, a ton of human hair approximately costs 50 lakh in the internationalmarket. The demand is high for virgin remy hair(quality hair) in European countries, suchas Switzerland, Italy and France, while the non-remy is sent to China.

(Extracts from http://wwwj'btimesxoJn/a-hairy-business-that-is-booming-into-a-million-dollar-industry-532232)

OPERATIONS:

The Financial Year 2013-14 has been another successful year for the Company. Inlinewith previous years performance, the Company continued to grow at an unprecedented 195.58%in revenue and 92.56 % in Profit afterTax compared to FY 2012-13.

The revenue from operations stood at Rs.2354.43 Lacs against Rs.796.54 Lacs in theprevious year, resulting in PAT of Rs. 148.47 Lacs as against PAT of Rs.77.1 in theprevious year.

FUTURE OUTLOOK:

The demand for Indian Hair is ever increasing because of its high quality. Apart fromthe sale of raw processed hairs, the Company is focusing on producing distinct varietiesof hair wigs to cater to the needs of European markets and other overseas markets.Although the competition from China is very stiff, the management is putting the bestefforts to emerge as a competitive and world class producer of wigs.

OPPORTUNITIES & THREATS

Strength: Huge demand of Hair wigs produced in India in foreign countries,providing high export potential.

Weakness: To get the Hairs for the manufacturing of wigs whenever required is notpossible. So it needs to be purchased in bulk quantity whenever it is available, requiringheavy capital investments in stocks.

Opportunities: Asian hair grows the fastest and has the greatest elasticity, makingit the most preferred wigs around the world. There is huge demand for human hair andArticles of human hair in China, Brazil, Spain, Korea, U.K, Hong Kong .Indonesia, Italy,Austria, Germany etc.

Threats: Earlier the industry experienced serious threat from synthetic hair.However, the synthetic hair had not found favorwith the consumers, as it is said to havecaused allergic problems and cancer. Other perceived threats are Un Organized Sector,largely dependent on overseas market and normal market competition.

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

The philosophy we have with regard to internal control systems and their adequacy hasbeen formulation of effective systems and their strict implementation to ensure thatassets and interests of the Company are safeguarded; checks and balances are in place todetermine the accuracy and reliability of accounting data. The Company has a well definedorganization structure with clear functional authority, limits for approval of alltransactions. The Company has a strong reporting system, which evaluates and forewarns themanagement on issues related to compliance. Company updates its internal control systemfrom time to time, enabling it to monitor employee adherence to internal procedures andexternal regulatory guidelines.

PERSONNEL:

Human wealth is the ultimate wealth in for any industry. The Company recognizes thisfact and understands that employees are one of the most important sources for sustainedgrowth of any business. Quality personnel delivering their optimum potential for theorganization is the key differentiator. The Company maintained good relations with itsemployees and there was no unrest in the Company at any point of time.

Industrial relations in the organization continued to be cordial and progressive.

HEALTH AND SAFETY:

The Company places considerable emphasis on health and safety throughout its operationand displays commitment to ensure the high standards being maintained in compliance withapplicable laws and regulations.

FORWARD LOOKING / CAUTIONARY STATEMENT:

Certain statements in the Management Discussion & Analysis Report detailing theCompany's objectives, projections, estimates, expectations or predictions may be forwardlooking statements within the meaning of applicable securities laws and regulations. Thesestatements being based on certain assumptions and expectation of future event, actualresults could differ materially from those expressed or implied. Important factors thatcould make a difference to the Company's operations include economic conditions affectingdomestic demand supply conditions, finish goods prices, changes in Government Regulationsand Tax regime etc. The Company assumes no responsibility to publically amend, modify orrevise any forward looking statements on the basis of subsequent developments, informationor events.