Computerskill Ltd Management Discussions

COMPUTERSKILL LIMITED ANNUAL REPORT 2007-2008 MANAGEMENT DISCUSSION AND ANALYSIS INDUSTRY OVERVIEW Normally The company operates in two broad segments, which are designated as Computer Consumable Division (CCD) and Optical Media Division (OMD). CCD In CCD, Computerskill is manufacturing a comprehensive range of continuous stationery products and is also marketing the other related Data Media Products. Under the said division, Computerskill is also supplying certain specialized security printing products like MICR Cheque Books, variable data processing and printing, etc. Again, as a part of CCD, the company was importing and markets Computer Peripherals like floppies, data cartridges, toner cartridges and other consumable products, which are commonly used in any EDP installations. However, due to liquidity crunch, the said activities are presenty not carried out. The Stationery Printing industry is an evergrowing industry. However, with the advent of new technology, one has to keep pace with it and modernize. OMD (CD-R & DVD-Rs) In OMD, the Company was manufacturering CD-Rs& DVD-Rs in its most sophisticated plant. The CD-Rs manufactured have met the most stringent standards normally expected for these types of products by the international markets. The CD-R & DVD-R industry is growing at a steady pace but with the steep increase in raw material cost and cut throat competition from other Asian countries, it has become a volume game. PERFORMANCE AND REVIEW OF OPERATIONS The segment-wise performance of OMD and CCD is briefly summarized below: (Rs.ln Lacs) Particulars CCD OMD TOTAL SALES - Export 0.00 0.00 0.00 - Domestic 761.59 20.79 782.38 - Total Sales 761.59 20.79 782.38 Operating Profit (76.56) (1245.56) (1322.12) before Allocation of Common Expenses FUTURE OUTLOOK & STRATAGIES OMD Presently the OMD is inoperative for want of raw material. More so, it beens incompetitive to Manufacture & market OMD produets due to cut-throat competition. It is expected that once the unit is-declard as Sick, the restructuring package will be worked out by operating agency and the Company will be able to restart its plant. CCD The Company is concentrating more on specialized security printing products like MICR cheque books, personalized cheque books etc. The volume in this segment is expected to substantially go up. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has proper and adequate systems of internal controls to provide reasonable assurance that all assets are safeguarded, transactions are authorized, recorded and reported correctly and to ensure compliance with policies, statutes and code of conduct. The internal control system provides policies, guidelines, and authorization and approval procedures. The effectiveness of the Internal Control is continuously monitored by the Internal Auditors. The role, responsibility, authority and accountability of Internal Auditors is guided by the Audit Committee and Company Management. The scope of Audit activity is broadly guided by the Company Management and approved by the Audit Committee. The Company-has an Audit Committee which regularly reviews the reports submitted by the Internal Auditors. The committee met regularly during the financial year and reviewed Audit observations and followed up for implementation of corrective actions. The Committee also met the Companys statutory auditors to ascertain their views on the adequacy of the Internal Control System in the company and their observations on the financial reports. The audit committees observations are acted upon by the Management. HUMAN RESOURCES AND INDUSTRIAL RELATIONS Industrial relations remain normal and there were no significant labour issues during the year. The board of directors and the management wish to place on record their appreciation of the efforts.put in by all employees.