Suncare Traders Ltd Management Discussions.
Industry Structure and Developments:
Indias GDP is estimated to have increased 7.2 per cent in 2017-18 and 7 per cent in 2018-19. India has retained its position as the third largest startup base in the world with over 4,750 technology start-ups.
The decorative and laminate industry market is continuing to grow at a moderate rate of 12% to 15% annually and with more awareness of quality products used by the developers. The industry gap between the organized and the unorganized sector has been narrowed down significantly with the implementation of GST which has made the competition healthy and rationalized the tax burden on the organized industries thereby making it easier to penetrate the market and scale up the business activities.
Revival of Real Estate: With signs of revival of the real estate market in addition to the reduced risk in the industry thanks to the real estate regulations latest act, the delayed projects are now resuming and picking up pace thus forming a positive outlook for laminates industry in the coming future. Still there is largely untapped market and our efforts are to explore and expand the new market which will help to increased liquidity and profitability of the company.
Market Network: To maintain market operations company has continued its operation through Ahmedabad office and Jaipur Branch.
Government of India, has launched the Make in India initiative with an aim to boost the manufacturing sector of Indian economy, to increase the purchasing power of an average Indian consumer, which would further boost demand, and hence spur development, in addition to benefiting investors.
Government gives priority to Infrastructure and real estate Sector as part of its policy i.e. roads, bridges, hospitals, Housing, Hotels, Commercial Properties etc. The growth in this sector will lead to the growth of Companies which are connected with Interior Infrastructure items.
Around 1.29 million houses have been constructed up to December 24, 2018, under Government of Indias housing scheme named Pradhan Mantri Awas Yojana (Urban), which will provide boost to our industry.
Raw Material: The wood based panel industries are dependent on natural forests for their raw material requirement; it is crisis in view of the restrictions on timber extraction owing to environmental considerations.
Manpower: Company is in trading of Laminates products, company does not require any technical personnel, other than marketing personnel.
High Competition and Law Profitability: The laminate Industry has entered into the orbit of the high competition. Various brands and various quality laminates are available in the market. Due to high competitions in market, we have to lower the profit margin to maintain the turnover of the company.
New Entrants: More and more new organized and unorganized players are entering into market which will increase competition in our business sector also.
Imported Laminates: Dumping or Cheap import from China and other Countries of laminates, MDF and other furniture products has created the stuff competition in the laminates markets. This may affect our turnover and profitability in near future
Risk and concerns:
Stiff competition from the organized and unorganized players as well as from the imported laminates resulting in lower margins or losing out the customers. However, due to superior quality products, the company has at its own, penetrated newer markets and maintained its offerings and sales revenues. The weakening of rupee will prove to be a major setback which will directly affect all raw material prices in both the doors and the laminates vertical.
Internal Financial Control Systems and their adequacy:
The Company has aligned its current systems of internal financial control with the requirement of Companies Act 2013. The Internal Control is intended to increase transparency and accountability in an organizations process of designing and implementing a system of internal control. The Company has successfully laid down the framework and ensured its effectiveness. The Company has in place a well-defined system to record data for accounting and management information purposes and connects to different locations for efficient exchange of information.
Though the various risks associated with the business cannot be eliminated completely, all efforts are made to minimize the impact of such risks on the operations of the Company. Necessary internal checks and control systems are to be implemented by the Company on various activities in the organization to ensure that business operations are systemized in achieving the best performance.
Doshi Maru & Associates., Chartered Accountants, the statutory auditors of the Company has audited the financial statements included in this annual report for the year 2018-19 and has issued an attestation report on our internal control over financial reporting (as defined in section 143 of Companies Act, 2013).
The audit committee meets the statutory auditors of the Company to ascertain, inter alia, their views on the adequacy of internal control systems and keeps the board of directors informed of its major- observations periodically. Based on its evaluation (as defined in section 177 of Companies Act 2013), our audit committee has concluded that, as of March 31, 2019, our internal financial controls were adequate and operating effectively.
Material Developments in Business activities, Human Resources / Industrial Relations Front, including number of people employed:
The Company always recognizes the importance of manpower. Company promotes employees and encourages them to make contribution toward company, family and nation at large. Company also encourages the employees to offer their creative suggestions for development in their respective areas which are thoroughly discussed in periodical meetings. The company enjoyed excellent relationship with staff during the last year as on March 31, 2019 the company has 14 employees at its Jaipur Office and administrative office. The Company has been maintaining cordial and healthy Industrial Relations, which has helped to a great extent in achieving the upper growth.
Turnover and Profitability:
In spite of closure of Bhivandi branch office company has maintained its business operations almost at level of last year. However due to increase in Finance Cost from Rs.15.38 Lacs to Rs.35.78 Lacs and increased in other expenses from Rs.36.74 Lacs to Rs.60.96 Lacs, on account of Fees payment to ROC and short term Loss in shares companys net profit is reduced from Rs.21.49 Lacs to Rs.6.04 Lacs on standalone basis.
Statement in this Management and Discussion and Analysis Report describing the Companys objectives, projections, estimates and expectations may be forward looking statement and within the meaning of applicable laws and regulations. Actual results may or might differ materially from those either expressed or implied.
|For and on behalf of Board of Directors|
|Suncare Traders Limited|
|Place: Ahmedabad||Managing Director|
|Date: August 30, 2019||(DIN:02114144)|