Sophia Traexpo Ltd Management Discussions.

Industry Structure & Development:

Paper production in India includes several types which are regularly and largely used in printing and packaging, writing, and a few specialty papers. Paper for printing and writing come as copier paper, super printing paper, bond paper, creame wove paper, map litho paper (surface size and non-surface), coating base paper and others. Paper for packaging includes boards, Kraft paper, posters and others. Other varieties are chromo paper/board, art paper/board and others. In India there are approximately 600 paper mills among which twelve are major players and also world renowned.

In India of total paper production 40% is from hardwood and bamboo fiber 30% is from agro waste other 30% from recycled material. Paper used for publications and Newsprint counts to 2 million tonnes. 1.2 million tonnes of newsprint are manufactured and the remaining is imported from other producers. It means that, about 40% of newsprint is brought in from outside the country.

The paper industry in India can be made more competitive by improving key sea ports, airways, road, railways and communication facilities. Plantations have to be raised by whatever means like industry, cooperative farmers and state governments to support wood based paper industry. For this the forest policy has to be accordingly revised. Degraded forest lands can be used to raise wood pulp plantations. Custom Duties on waste paper imports might be reduced, new & second hand machinery/equipment imports should be allowed duty free for a simpler and affordable technology up gradation.

Paper made products like filter paper, tea bags, tissue paper, medical grade coated paper, light weight online coated paper etc. are significantly rising in terms of usage in Indian markets hence Paper industry in India can look an extremely positive intent ahead.

Weakness and Threats:

Competitive strengths

- Large and growing domestic paper market

- Some competitive paper companies in newsprint, carton board and coated wood free

-Relatively low personnel and fuel costs (although personnel productivity is lower than in many competing countries and the quality of coal varies)

-Up to date research institute (CPPRI)

-Know how in non wood pulping and applications

-Well developed printing industry

-Local market knowledge

Risk and Concerns:

Your Company identified various risks and implemented its Mitigation Plans. Risk Policy and monitored frame works has been approved by the Audit Committee and the Board of Directors of the Company. Risk reporting and monitoring is being conducted regularly at all the operation levels and reporting directly to the Audit Committee and the Board

Discussion on Financial Performance with respect to Operational Performance:

Internal Control:

The Company has proper and adequate internal control systems to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and the transactions are authorized, recorded and reported correctly. The internal control system provides for well documented policies, guidelines, authorizations approvals and procedures. The observations arising out of audit are subject to periodic review, compliance and monitoring. The significant observations, made in internal audit reports, along with the status of action thereon are reviewed by the Audit Committee of the Board of Directors on a regular basis for future appropriate action, if deemed necessary.

Performance Review

Discussion on Financial Performance with respect to Operational Performance:

1. Total Income: During the year under review Sophia Traexpo Limited has achieved a gross total income of Rs. 1,22,22,675

2. Share Capital:

The paid up share capital as on 31st March, 2019 is 5,10,00,000/- divided into 51,00,000 fully paid-up equity shares of Rs.10/- each

3. Net Profit:

The Companys operating Profit is Rs. 3,55,997 during the year.

4. Earnings Per Share (EPS):

The Earning per Share for the Financial Year 2018-19 is 0.07

Your directors are putting continuous efforts to increase the performance of the Company and are hopeful that the performance in coming year will overcome from the present situation.

Human resource:

Your company recognizes that the human resources are the most crucial factor for achieving sustained growth over the years. The management considers its highly motivated and passion driven work force as its partner in the growth of the company.

For and on behalf of the Board
For SOPHIA TRAEXPO LIMITED
Date: 03rd September, 2019
Place: Hyderabad. Sd/-
YERRAPRAGADA MALLIKARJUNA RAO
Chairman & Whole Time Director
(DIN: 00905266)