Nuway Organic Naturals India Ltd Management Discussions

1. Industry structure and developments

The Company engaged in the manufacture of cosmetics products and Liquor in India. It also involves in trading of cosmetics, bottled soda, soft drinks and packaging drinking water. The Company is based in Rajpura and it expanded its distillery at Devinagar, Tehsil - Rajpura and District Patiala in the state of Punjab with an investment of Rs. 400 million. The project involves distillery unit with a capacity of 45 kilo litres per day with change of spent wash treatment technology from Bio-methanation followed by secondary aeration followed by Ferti-irrigation to Decantation and evaporation. It manufactures Extra Neutral Alcohol (ENA) and bottling of liquors. The distillery consumes grains like broken Rice, Bajra and Jowar as raw materials which is readily available in Punjab. The Company produces ENA, finished products like vodka, health drinks and IMFL, DML, PML etc. It plans to supply ENA to the pharmaceutical industry also.

2. Opportunities and threats

The liquor industry is growing at 8% and Indian liquor market is very under-penetrated as compared to other foreign markets. Growth opportunities are very high in this business. The

Company is aggressively looking at domestic market as well as export market for marketing of the Company products. However, company faces competition from manufacturers of Indian as well as international brands.

3. Segment wise or product wise performance

The major source of earning of the Company is from manufacture and sale of liquor and earnings from trading of cosmetics, bottled soda, soft drinks and packaging drinking water amounts to less than ten percent.

4. Outlook

Your Company is making all efforts to accelerate the growth of its business. The plant is setup for distillery with storage facilities for the grains and equipped with latest technology machinery. The Company has setup, state-of-the-art potable alcohol unit with a production capacity of 45 Kilolitre per day. Your Directors are optimistic about the future prospects of the Company.

5. Risks and concern

The Company is exposed to the market risks like change in demand, availability of raw material and the change in government policy.

6. Internal control systems and their adequacy.

Internal control systems and procedures in the Company are commensurate with the size and the nature of Companys business and are regularly reviewed and updated by incorporating changes in regulatory provisions in order to safeguard the assets and to ensure reliability of financial reporting.

7. Discussion on financial performance with respect to operational performance

The gross block of assets of the company stood at Rupees 57.89 crores and net worth of the company is Rupees (32.56) crores at the end of current financial year.

8. Human Resources

The Company continues to give priority to its human assets. The Company provides a fair and equitable work environment to all its employees. The Company is continuously working to create and nurture an atmosphere which is highly motivated and result oriented.