NRC Ltd Management Discussions

MANAGEMENT DISCUSSION & ANALYSIS

The Company has three strategic business units viz. Rayon, Nylon Tyre Cord & Chemicals. The Company also has a Captive Power Plant of 24 MW capacity.

A brief reporting on the market segments is as follows:

BUSINESS SEGMENT – RAYON

- Domestic Consumption of VFY declined 5% to 54014 MT with the result domestic VFY production remained at 44348 MT.Import declined by 21%.

- The prices of key raw material that is Rayon grade wood pulp continued to remain soft due to over supply on account of capacity addition.

BUSINESS SEGMENT – NYLON

- Cheaper imports from china & South East Asian countries (under most favoured nation) continues to put pressure on the industry, however anti dumping on NTFC mainly from China provides some respite. The anti dumping duty is to continue till April 2020.

- The tyre Companies are increasingly demanding dipped fabric.

- The down word trend of crude oil prices maintained raw materials price at ease.

BUSINESS SEGMENT – CHEMICALS A) CAUSTIC SODA

- Domestic Caustic Soda demand expected to grow due to commission of new Alumina & Fiber capacities in the country. However prices continue to remain under pressure due to sufficient supply.

B) CS2

- Prices continue to remain under pressure as supply is more than demand.

C) H2SO4

- Prices of H2SO4 remain stable during the year as Supply & Demand matches.

INTERNAL CONTROL SYSTEMS & ADEQUACY

The Company has adequate internal control procedures commensurate with its size and nature of business. It ensures that all assets are safeguarded and protected gainst improper use and that transactions are authorized, recorded and reported correctly.

The Management carried out periodic checks to review the efficacy of the checks and balances in the organization. The management also independently carries out checks at its various branches and offices with a focus on adequate internal control. In addition, Audit Committee of the Board of Directors also periodically reviews the internal control system and the Management carries out their suggestions for improvement.

There were no manufacturing operations during the year; however, the essential services were in operation.

FINANCIAL & OPERATIONAL PERFORMANCE

HUMAN RESOURCES & INDUSTRIAL RELATIONS:

The Company strongly believes that its team of capable and committed manpower is the key factor behind its achievements and success. Efforts are being made to create and nurture an Organization that is highly motivated, result oriented and adaptable to the changing business environment. Our relationship with the employees continues to remain cordial.

CAUTIONARY STATEMENT

Any statements made in these analyses relating to Company’s objectives, expectations, estimates, projections, etc. may be considered as "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results may differ from such estimates, projections, etc. whether expressed or implied. Factors which could make a significant difference to the Company’s operations include climatic conditions, market price in the domestic and overseas markets, changes in Government regulations and tax laws, economic conditions affecting demand/supply and other environmental factors over which the Company does not have any control.