BUSINESS REVIEW
Industry Structure & Development
In view of the Governments various development policies, growth in infrastructure development both in private and public sector are being followed gradually. Since the Companys business is mainly involved in Engineering, Procurement, Construction (EPC) sector, hence, the growth in public and private sector has direct impact in the Companys business. However, since the Company has become sick (Referred to BIFR) and there is no financial support from Bank, hence there is limitation in the business development of the Company.
Financial Performance
During the financial year 2015-16, the Company has bagged orders aggregating to Rs. 1.69 crores.
Revenue for the financial year ended 31st March 2016 was Rs 6.34 crores against Rs. 16.99 crores in the previous year. Revenue during the period under review were less than that of the corresponding period of the previous year due to non availability of Bank finance, lack of orders etc. which resulted in loss of the Company .
Risk and Concerns
As informed to the members in the Annual Report of last year that the Board for Industrial & Financial Reconstruction (BFR) had informed that our reference to the BIFR had been registered as case no. 31/2015. In view of the situation and due to non availability of any Bank facilities, it has become very difficult to bag any new order. The growth in the business prospect has become limited.
However, in the changed scenario, management is trying hard to get the order and to do the maintenance job and the job of subcontracting with small supplies from its existing clients ie. SAIL, TATA Power etc.
Management Information System
MIS has been formulated for collecting information, analyzing the same and reporting to the management for prompt and quick decision.
Opportunities & Threats
The business growth is directly linked with capital investments which the Company is presently lacking. However, thrust has been given where very low investment of capital is required.
However, one of the major threats in this area is stiff competition from small companies, who are offering their services in lower rate and the Company has to overcome this barrier by total control over its overhead cost.
Segment wise Performance
The Company was mainly engaged in Project Management and Construction in various projects sites and fabrication of structural materials there at. The project & construction services deal with overall Project Management, Design & Engineering, procurement of bought-out items, Fabrication & Erection of pipes & equipments at various sites including civil, structural, electrical and instrumentation. However, due to lack of Bank finance presently the Company has to concentrate in Maintenance job.
Outlook
Management is processing the plan for survival and growth of the Company and hope by the business help from the Principal Company and its associates, Company will grow gradually.
Internal Control Systems
The company has in place adequate systems of internal control and documented procedures covering all financial and operating functions. These have been designed to facilitate the function of maintaining proper accounting controls, monitoring of economy and efficiency of operations, protecting assets from losses and ensuring reliability of financial and operational information. The Company constantly endeavors to upgrade the system of internal control to ensure optimum utilization of its resources.
The Company has also an integrated computer system in commensurate with the operations of the Company. The Audit Committee of the Board of Directors reviews the operations and financial reports of the Company at periodical intervals. The internal Auditors of the Company do the necessary checking of documents relating to various financial activities and its necessity with the corporate goals and make reports thereon.
Industrial Relation & Human Resource Management
In the changed scenario, the Company has to rationalize its manpower commensurate with its revenue income. S & L have few experienced senior level as well as middle level management professionals, useful to meet the challenges of the jobs undertaken. However, management will increase its appropriate strength of human resource keeping in parity with the future business.
Cautionary Statement
Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be forward looking statements within the meaning of applicable Securities Laws and Regulation. Actual results of the Companys operations may change due to economic conditions, change in the Government regulations, tax laws and other statutes and other incidental factors.
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