cg ppi adhesive products ltd Management discussions

CG PPI ADHESIVE PRODUCTS LIMITED ANNUAL REPORT 2007-2008 MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL HIGHLIGHTS: Particulars 31.3.2008 31.3.2007 Rs. Lacs Rs. Lacs (a) Gross Sales/Income 1725.13 1605.65 (b) Less: Excise Duty 219.94 210.70 1505.19 1394.95 (c) Less: Operating Expenses 1096.41 1071.73 (d) Operating Profit 408.78 323.22 (e) Add: Other Income 7.66 8.49 (f) Profit before Interest, Depreciation, Amortisation, Exceptional Items and Taxes 416.44 331.71 (g) Less: Interest 0.77 2.71 (h) Profit before Depreciation, Amortisation, Exceptional Items and Taxes 415.67 329.00 (i) Less: Depreciation 45.18 42.80 (j) Profit Before Tax 370.49 286.20 (k) Provision for Current Year Tax (139.56) (99.24) (l) Provision for Deferred Tax 17.62 1.25 (m) Provision for FBT (0.99) (1.35) (n) PROFIT AFTER TAX 247.56 186.86 Taxation Adjustment of Earlier Years (8.43) (1.97) Doubtful Debts Reserves no longer required - 13.99 Carried to Profit & Loss Account 239.13 198.88 (o) Doubtful Debts Reserve - - (p) Transfer to/from General Reserve (18.60) (14.02) (q) Proposed Dividend including Tax Cess on dividend of earlier year (91.25) (77.57) (r) Balance brought forward from previous year 394.19 286.90 BALANCE CARRIED TO BALANCE SHEET 523.47 394.19 OPERATIONS: Your Company has achieved sales of Rs. 1725.13 lacs during the year. During the year 2007-08 the Companys sales has gone up by 8%. The domestic market for our range of products have been facing severe competition from imported cheaper tapes. However, due to strict control on operating costs, the operating margins have considerably improved. During the year there was focus on the following areas: 1. New speciality products like mica lamination, PTFE tapes, EPDM rubber tapes were developed for electrical industry. 2. Low margin products have been phased out. 3. Our Railway business has substantially increased due to on line tendering and completion of registration with all the Railway regions. 4. Focused marketing in the electronic and electrical industry, has yielded substantial improvement in sales and margins. 5. Sourcing, value engineering and process improvement has yielded substantial efficiency improvement in the operational areas. 6. Training of employees have been focused which has improved involvement and skills development. FUTURE OUTLOOK: Our products have achieved market leadership in the areas where we are operating. To increase our business, there will be greater focus on developments of new products in speciality application in wind energy, construction industry and electronic industry. This will involve substantial investment in product development and in upgradation of our machinery. HEALTH &SAFETY POLICY: The Company takes due and proper care to the health, safety and environment of its factory. Safety audits are conducted by external agencies and safety awareness programmes are undertaken periodically. Companys Health & Safety Policy takes care of the regulatory requirements and includes preventive measures in respect thereof.