Cenlub Industries Ltd Management Discussions.

1. Global Economics :

During the FY 2019-20 global economy is showing up and down again. Import and Export was not steady. As regards domestic business, the trend was downward and suddenly problem of COVID-19 came up, spoiling all our business sentiments.

2. Industry Strucutre :

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

3. Industry Structure and Deveopments :

As mentioned, your company caters to various fields. However, in Machine Tool Sector, we have around 90% market share. At present more than 1 Million systems are working in Machine Tool alone. Most of the machine tool builders, particularly CNC, have adopted our product as OE and we are getting repeat orders from them. Our manufacturing unit at Faridabad is coving North, East and West India while Bangalore Plant is covering South Indian market. The 3rd unit i.e. Rajkot, is covering Gujarat area. As regards Railway business, it is being fed from Faridabad manufacturing unit.

4. Opportunities and Threats :

As far as we are concerned, Machine Tool, Power and Steel Sectors are giving us a higher top line business. As regards opportunities we expect power sector as well as railway sector giving us good opportunities this year 20-21.

5. Risks & Concerns :

For the last few months an unknown virus i.e. COVID-19 has emerged as Pendemic spoiling the working of industries too. We anticipate big risk on performance as a whole. GDP will go down, and thus our performance and results too.

6. Internal Control System and their adequacy :

The company has adequate system of Internal Control System to commensurate with its nature of business and 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 standard and principles 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 record regularly.

7. Innovations and Intellectual property right :

From the beginning, the company is engaged in invocation by its own 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.

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.

9. Human Resource :

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

10. Dividend :

Due to additional borrowings made during the year, there is an increase in the commitments towards repayments to the leading Banks. As such, Board of Directors feels appropriate not to recommend any dividend for the Financial Year 2019-20.

11. Acknowledgemen :

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