Uniroyal Marine Exports Ltd Management Discussions.

Industry structure and development

Indias seafood industry has become one of the leading suppliers of quality seafood to all the major markets of the world. India has world class seafood processing plants that follow quality control regimes compliant to stringent international regulatory requirements.

The substantial growth of aqua culture farming in northern coastal areas is considered to be the main reason for the growth of Indian seafood exports. However due to the heavy competition from Vietnam, Indonesia, Thailand etc…, the profit margin is very less. The Kerala region had a bad year due to the excess cost involved in transportation of aqua culture products and the non availability of sea caught material. In Kerala the Aqua culture opportunities are still underutilized.

HACCP has helped the Indian seafood industry in becoming more organized and process-oriented. The international trade scenario is changing fast and the importers are insisting on stringent quality standards. Indian Seafood growth has been supplemented by the growth of shipment connectivity. India can ship to most of the destinations in the world. (Source: International Journal of Fisheries and Aquatic Studies)

With the growing demand for Indian seafood products across the world, the dynamics of the seafood business in India is changing fast. Though Kerala region had affected due to the excess cost involved in transportation of aqua culture products. In Kerala the Aqua culture opportunities are still underutilized. Countries to which a major portion of seafood is destined are becoming increasingly discerning and quality conscious. Our company was conscious about maintenance of quality. We had already taken steps to upgrade the hygienic and sanitary conditions of the workers, plant and machinery so as to ensure quality of the finished product. We have set up a new Quality Control office with ELISA screening kit giving priority to antibiotic free final products.

Opportunities/Risks Opportunities

1. Our Company enjoys the Green Channel Status for export of cooked product to USA and also approval for export of IQF and Block fishery products to the European Union.

2. Presence of major R&D Institutes like MPEDA, CMFRI, CIFT, NIFPHATT, CIFNET, KUFOS & CUSAT.

3. Aquaculture potential in reservoirs, lakes, back waters, bays and estuaries for fish, bivalves etc.

4. Sea port connectivity through Cochin and upcoming seaports like Vizhinjam & Colachel.

5. Increased freshwater fish production will help to expand the fish processing units to inland areas.

6. The increasing demand for sea food all over the world.

Risks/Threats

1. Risk of dealing with perishable goods

2. Availability of raw material would depend upon the seasons; Company is largely dependent on natural sea caught material.

3. Selling prices are governed by demand of goods in international market.

4. Export realization is affected by changes in Rupee Dollar exchange rate.

5. There is a possibility of the shrimps getting affected by virus and diseases which may affect the availability of cultured shrimp.

Internal Control System and their adequacy

Company has been maintaining adequate internal control systems commensurate with the size and volume of the business with respect to the purchase of stocks, raw materials (including components), plant and machinery, other assets and sale of goods. It also ensures that all the assets of the company are adequately protected against loss and all the transactions are properly authorized, recorded and reported. The

Internal Control System is supplemented by Internal Audit conducted by an independent Chartered Accountant.

Financial Performance

As the company is engaged in manufacture of marine products only, . segment wise analysis is not significant

Industrial relation and human resource management

Your Management firmly believes that success of any organization comes from good Human resources. Employees are considered as important and valuable assets of the organization and key to its success. Total number of employees directly employed by the company was 78.

Cautionary Statement

Statement given in this section describing the companys objectives, projection, estimates, and expectations may be "forward looking statements" based on the present environment, rules and regulations. The actual result could differ materially from those expressed or implied. The important factors that could make a difference among others are economic situation affecting demand and supply, price fluctuation both in domestic and international markets in which the company operates, changes in Govt. regulations, consumer taste, tax laws and other statues and other incidental factors. The company assumes no responsibility to publicly amend, modify or revise any of the forward-looking statements on the basis of any subsequent developments or events.