Indo Bonito Multinational Ltd Management Discussions

Industry Structure, Developments and Outlook

The Company management identified the potential of the venture and thus diversified its business by entering into association with Inspire Group which is involved in venturing with the basic elements such as Water, Health care education, etc.

The Company have diversify the Main Business activities and presently carrying out activity of manufacturing, assembling, trading, buying, selling, importing, exporting and dealing in Water Purification Systems and Water Treatment Technologies consisting of water purifier machines, water treatment and purification plants, instruments, devices, spares, accessories, tools or other articles or goods relating to water purification and water treatment technologies, in order to optimize the facilities of the Company. Thus, to conclude the Company is presently carrying out the projects related to clean drinking water treatment technology.

The company sees a very large potential for itself in this business space considering the national importance. As Clean Drinking Water programmers are being implemented at all levels i.e. at Central Govt., State Govt., Municipal & Zilla Parishad, Development Boards etc. the Company can get itself actively involved in same, and also can grow financially with a good cause as well.

The company is primarily focusing on following three areas-

1. Providing Clean Drinking water to the rural schools through JALMANI (Central Govt Sponsored Program) and Shiksha Abhiyan (Central Govt Sponsored Program).

2. Creating Water Entrepreneurship through BOOT Projects by a tripartite agreement which will be entered between the Infrastructure Owner ,Water Entrepreneur and their company.

3. Promoting the "WATER ON WHEELS" concept i.e. BOOT Model wherein the process is mobile on a autorikshaw.

Opportunity

Further, Government of India, in the Financial Budget of 2013-2014 allocated Rs. 1,400 crore for setting-up of water purification plants in 2000 Arsenic and 12000 fluoride-affected rural habitation. Not only this, but Ministry of Drinking Water and Sanitation have also allotted Rs. 15,260 crore. Considering this Financial Allocation by the Government, the Company is looking forward towards same as business opportunity to expand its business.

Risks and Concerns

The Company has risks on account of contractual obligations as per the agreements with its customers. Also it has risk of exchange fluctuations for its exports business. The credit risk in export business is mitigated by taking ECGC cover for its exports business.

The area of concern in the building materials segment is its moderate growth during FY 2012-13.However your Company being merely a trading company in this line,does not foresee higher risk as compared to the manufacturers of similar products.

The risk in the water and related infrastructure business is the budgetary allocation by Government on its water supply programs. However clean drinking water being a key health concern and managed by a separate ministry ,this risk is mitigated.

Internal Control Systems and their Adequacy

The Company views Internal Control as a tool for improving operational performance and ensuring reliability of reporting mechanism. The Company is equipped with adequate internal control systems for its business operations which determine the efficiency of its operational strengths in financial reporting and ensure compliance with applicable laws and regulations. The internal control systems are supplemented by extensive audits conducted by internal auditors. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use or losses, executing transactions with proper authorization, and ensuring compliance of corporate policies.

Human Resources and Industrial Relations

The Company understands that employees are vital and valuable assets. It believes in creating a favorable work environment which can lead to innovative ideas. The Company has an optimum process of recruitment and awarding its human resource which leads to attraction and retention of highly qualified and productive individuals in the organization. This selection process is continually assessed and refined based on performance tracking of past recruits. The Company further trains the individuals through training programmes. The Company believes in promoting and nurturing work environment which is conducive to the development and growth of an individual employee, by employing the best HR practices such as performance management, reward and recognition policy, open work culture and effective employee communication.

The total number of employees in the Company stands at 93 (including employees employed on contract basis).

Discussion on Financial Performance

The financial results and performance for the year are elaborated in the Directors Report.

Cyclicality / Seasonality in the Industry

Water and related infrastructure business is not seasonal as it is a basic necessity and has demand throughout the year.

Cautionary Statement

Statements in the Management Discussion and Analysis Report describing the Companys objectives, projections, expectations and estimates regarding future performance may be "forward looking statements" within the meaning of applicable securities laws and regulations and are based on currently available information. The management believes these to be true to the best of its knowledge at the time of preparation of this report. However, these statements are subject to future events and uncertainties, which could cause actual results to differ materially from those that may be indicated by such statement.