Industry Structure and Development:
The Indian Leather Industry plays a significant role in the Indian
Economy in view of its substantial export earnings, employment generation and growth
opportunities. The export of leather and leather products has increased over past few
years.
The Company is striving high to capture over Global Market in respect
of Leather and Leather Products. The Company has taken various steps to promote companys
products all over the world and it is being done in line with global trends to enhance
scale, global competitiveness and financial flexibility and also to contribute towards
achievement of companys objective and to increase revenue, production volume, market
shares and shareholders returns.
Your company in view of the competitive scenario has taken various
steps to meet these challenges and also capitalize on budding opportunities available. The
company is regularly carrying out detailed analysis of leather industry and has been
making all possible efforts to understand the various minutiae of the emerging market
scenario. The company has been investing considerable amount of funds on its Research
& Development Programs in order to enrich and improve the quality of products.
Opportunities:
Company has gained reputation and established itself globally as
Supplier of quality products. The company has demonstrated global competitiveness and has
achieved international standards for the quality of its products and its immense
capabilities provide massive opportunities in the foreign market. Companys overall
strategy is to enhance shareholder value by receiving better returns through a long-term
investment.
Threat:
The company is fully aware of the factors dictating competition and has
been investing with the ups and downs through its various effective measures like cost
optimization, competitive pricing, improved production process and enhanced customer
satisfaction.
Even under difficult operating conditions, company has been
consistently performing at its best. It is expected that companys sound policies,
competitive cost position will enable the company to lead the market effectively.
To exist in the competitive market and improve the value of
shareholder, company is consistently considering all the significant factors, which
provide sharp edges that enable company to enhance the margin.
Out Look:
Companys maximum operational income is based on the margin on export
of leather and leather products. As most of part of the earning is realized from Export,
out look depends upon the global economic scenario, global demand and supply and
International product prices. Above all the performance of your company largely depends on
the Eximp policy of the Union Government. Looking at the overall development of the Indian
economy and the efforts of the Central Government to achieve higher GDP, Board of
directors of your company is very much optimistic to the future of the Company.
Risks and Concerns:
Although Your Company does not perceive any serious threat, still
company is taking care against the risk of growing pressure of prices, foreign exchange
rates variation, current and future litigation, working capital management, bad debts etc.
Foreign exchange liabilities / revenues are mainly concerned with the companys operation.
Regular monitoring of movement of foreign exchange rates is carried out and decisions are
taken as to when outstanding are to be covered and payments are to be made. Working
Capital requirement are to be kept at minimum level in orderto maintain the lowest
possible interest rate.
Company has strongly prepared itself to meet cutthroat competition in
global market by adhering to international quality standards of its product.
In addition to above company has overall risk management strategy,
follows such practices & policies that are
framework of efficient m anagement to count the risk in ad vance.
Internal Control System and their Adequacy:
The company has made sufficient arrangement for internal control system
and its monitoring for keeping proper record ofthe purchase of raw materials, stores,
components, plantand machineries, equipments and all otherassets for production and sale
of finished leather and leather products. The company has clearly fixed rules and
responsibilities for all management personnel and all operational activities are well
controlled. The system ensures authorization of all transactions, records and the reports
correctly and properly through computerized system.
The Audit committee ofthe Company also re-examines adequacy of internal
controls, systems of risk management policies adopted by the Company.
Companys Laws and Regulations are also reviewed by the internal Audit
Team regularly from time to time and its report is submitted to the promoters and put up
in every Board Meeting. In order to provide sufficient support for business promotion
ofthe company, the finance and commercial functions have been properly set. The company
takes into account from time to time and Analysis its progress in accordance with the Laws
and Regulations set by the internal auditors and report to the Board in every Board
Meeting in support of best practices for internal control, standard operating norms and
guidelines are being issued. The Company also incorporates all financial operating, and
information technology systems are also evaluated from timetotime.
Environment and safety:
The Company feels its responsibility and is fully aware of the
importance to achieving exhibiting healthy environmental performance by checking effect of
its activities, product or services for the environment. The environment policy ofthe
company fully complies with the environmental laws and prevention of water, air and noise
pollution and all efforts are made for continual improvement in the environmental
performance. The Company has also initiated focusing its attention on "Charter on
Corporate Responsibility" under the policy ofthe Government of India. The Company
takes all measure to save and minimize the environmental effect on air, water by strictly
using and further sounding its environmental management system to meet its objective. The
Company ensures providing safe work place, machines and safety control measures within the
organization and a sense of safety consciousness is spread amongst all the workmen,
employees and supervisors.
Industrial Relations and Human Resources Development:
The Company gives much importance to maintain good relations with its
employees ensuring that employees feel valued and energetic in creating an atmosphere and
culture so that they can maximize their contribution in increasing the growth and further
development of the company, and in turn the Company thinks of individual growth of its
employees for their dedicated participation in organizational development.
The companys priority is to reduce the employees turnover ratio. The
companys approach and efforts are to create congenial work environment for individual
growth, which enablethe development of whole organization. Relationship with the employees
remains cordial through out the year. The company has a team of over 500 dedicated
employees working towards the companys mission.
Discussion of Financial Performance with respect to Operational
Performance:
Effective working management is regularly concentrating to reduce the
cost of debt as much as possible. Prudent cash management endeavor to utilize the optimum
Working Capital in order to reduce the interest cost and also to avoid the bottleneck of
companys operation.
Research & Development
The company is committed to continue technological innovation, physical
and chemical standardization and improvement to achieve high standards of product quality
and customer satisfaction
Key factors that keep the company one step ahead:
a. Extensive interaction with the latest technological developments.
b. Presence in all major trade fairs, seminars and workshops for
optimum knowledge up gradation.
c. Well qualified and progressive workforce.
d. Fully equipped Laboratory
The tannery units of the company work under guidance of a well-equipped
laboratory conducting physical and chemical tests. It also has a pilottannery to conduct
trials of new leathers at a small scale before its implementation in bulk production. The
laboratory has all the requisites to perform tests of leather as per EN, ISO and DIN
standards. The company is amongst few companies which provide certification as per the
REACH guidelines of European Chemicals Agency.
Design Studio: The footwear units of the company conduct their
production as per the guidance of a newly built, state of the art designing cell, lead by
well qualified shoe technologists and designers. Due to a rapid change in the product
profile over the past few years, this studio was installed keeping in mind the
ever-changing tests and preferences of the customers, while keeping time frame into
consideration.
Quality Assurance: Amajor factor which keeps the company ahead is its
obsession with total quality, which includes products of the highest standards, quick and
efficient customer service, leading to complete customer satisfaction. Factors like these
help the company to retain customers, some of them, for as long as 31 years.
Cautionary Statement:
Statements in the Management Discussion & Analysis Report which
seek to describe the companys objectives, projections estimates, expectations and
predictions may be considered to be "forward looking statements" and are stated
as required by applicable laws and regulations. Actual results could differ from those
expressed or implied. Many factors including global and domestic demand-supply conditions,
prices, raw materials availability, technological changes, changes in Government policies,
tax laws and other statues may affect the actual results, which could be different from
whatthe Directors envisage in terms of future performance and out look.
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