kajaria plus pvt ltd Management discussions

KAJARIA PLUS LIMITED ANNUAL REPORT 2005-2006 MANAGEMENT DISCUSSION AND ANALYSIS Performance Your Company reported a good performance during the year under review, registering an income growth by 12.03 per cent from Rs. 6615 lacs in 2004- 05 to Rs. 7411 lacs in 2005-06, on account of a volume growth. Post-tax profit for the year under review increased phenomenally by 179 per cent from Rs.68 lacs in 2004-05 to Rs. 190 lacs in 2005-06. Your Directors are confident that your Company will report a substantially improved performance during the current fiscal. Operations Your Company took a number ,of initiatives to strengthen its reach to cover a larger number of potential geographies: * Participated in industrial fairs and exhibitions (such as the HDFC loan mela in Raipur and the ICICl fair in Visakhapatnam), showcasing the latest products range launched by Kajaria Ceramics and the recent concepts designed by your Company. * Organised a number of builder and architect meets to display new products being launched and collecting knowledge of the trends being preferred by the end-consumer. Investment in renewable energy sources The company has invested Rs. 628.87 lacs for setting up a windmill project with a capacity of 1.25 MW at Nandurbar, Maharashtra for the sale of power. Outlook The demand for tiles is expected to increase in the foreseeable future. India is leveraging its advantage of a large growing home market and an expanding global footprint to emerge as one of the most exciting stories in the global tile industry today, due to the following reasons: * There is a bigger market for branded ceramic tiles now than before - Indias premium housing segment priced more than Rs.12 mn each is growing at a phenomenal 25 per cent a year (source: KSA Technopak). * Growing affordability among a larger slice of the population pie. * The easy availability of financing option and the extension of tax benefits to individual and on Housing Projects shall boost the housing demand further over the medium term. * Fiscal incentives by the government. To capitalise on this growing market, your Company is expanding its presence in non-metro cities significantly. In doing so, your Company is expected to create a strong consumer pull, increasing turnover and profitability.