Cenlub Industries Ltd Management Discussions.

1. Global Economics :

During the year 18-19 again global economy is showing up and down features. This is apparently because of brexit again. Import and Export is steady during the dollar price.

2. Industry Structure :

Your company is not only a simple lubrication system manufacturer but it takes care of various sectors covering from Machines, Power, Steel, Paper, Railway, Navy etc. The company is very anxious to get business from Railway and Navy Sector. Power sector is going to become our main sector.

3. Industry Structure and Developments :

As mentioned above, your company caters to various fields. However, in Machine Tools sector, we have around 90% market share. At present more than 10,00,000 Systems are working in Machine Tools alone. Most of the machine tools builders, particularly CNC, have adopted ouor product as OE and we are getting repeat order from them. Our manufacturing unit at Faridabad is covering North. East and West India while Bangalore Plant is covering South India market. The 3rd unit i.e. Rajkot, is covering Guarat area.

4. Opportunities and threats :

GDP of India is growing reasonably well and thus all industrial sectors are also taking shape. Here Machine Tool, Power Sector, Steel Sector, Paper Sector are getting mainly affected. As far as we are concerned, all these sector are our backbone. Machine Tool, Power and Steel sectors are giving us a higher top line business. We expect the same in the next financial year also. As regards opportunities we expect power sector as well as railway sector giving us good opportunities this year 19-20.

5. Risks and Concern :

This is not limited to economic condition. It is equally depend on labour shortage, competitive market and threats given by new entrance as a competitor. We have 3 manufacturing units because of this reason. If one unit does not behave properly, the other unit will take care of the market. That is our strategy from the beginning. Keeping this into mind, after amalgamation of Minihyd and Ganpati one more unit has become into existence where you plan for small automotive components.

6. Internal Control System and their adequacy

The Company has adequate system of Internal Control System to commensurate with its nature of business ad size of operations to safeguard and protect from loss, unauthorized use or disposition of Companys resources. There are proper procedures for authorization, recording and reporting of transactions to the management. Systems and procedures exist to ensure that all transactions are recorded as necessary to permit preparation of financial statements in conformity with applicable accounting standards and priciples or any other criteria applicable to such statements and to maintain accountability for assets. The Companys internal audit process covers all significant operational areas and reviews the records regularly.

7. Innovation and intellectual property right

From the beginning the company is engaged in innovation by its opwn R&D activity. There are certain areas where innovation related to Lubrication is needed. Once such a goal is achieved, patent/intellectual property right also to be thought.

We have an idea to apply for (IREPS) for Rail Track Lubricator.

8. Operational Performance

This year operational performance of the company shall depend upon certain level because of GST (Goods and Service Tax). Besides this, national economic condition will also effect. As regards GST is concerned, it was more awaited and accepted by most of the manufacturing units. But the small scale units are finding it little difficult and cumbersome. The input coming to the company is less than the output tax. This is little confusion.

9. Human Resource

The company is taking various initiative to increase human resource for better productivity by providing internal training and develop of skills to non experienced staff. This will help in enhancing their emotional and intellectual engagement with the company.

10. Dividend

In the year 18-19, our revenue was encouraging & hence profitability was appreciable, the board of directors decided to offer to all share holders a dividend of 25%.

11. Acknowledgement

Your Directors acknowledge and thank the Companys customers, shareholders, vendors, statement government authorities, business associates and bank for the support extended to the Company. Your Directors also record their appreciation for the commitment and dedication of the employees of your Company.