Vera Synthetic Ltd Management Discussions.

A) INDUSTRY STRUCTURE AND DEVELOPMENTS Industry Structure:

Over the last year, we have seen a revival in the Indian economy with macroeconomic indicators now starting to trend favourably. With policy reforms and de-bottlenecking of processes initiated by the government, the global sentiment towards India has improved substantially. Your company, as you are aware, has been manufacturing of fishing nets ropes, twines yarns, mainly high density plastic products. Based on market demand, companys productshave been diversified into plastic engineering products.

Developments:

Modernization and expansion into more value added products and Technologicaldevelopment has been the tradition of your Company. Innovation & development is the key for growth in any forward looking company.

B) OPPORTUNITIES

India emerges as the Worlds fastest growing large economy with projected GDPgrowth at 7.2% during FY 2017-18. This is an opportunity for demand in plastic engineering products.

C) THREATS

Increasing competition from domestic and foreign players could lead to margincontraction due to pricing pressure. Some of the larger global players are alreadypresent in India. Highly fluctuating price of grenules which is the principle input to the plastic Industry, continues to be of serious concern. The rising cost ofproduction, especially due to wage increase and rise in prices of other materials &services, short & stringent delivery schedule by customers in the background ofhighly volatile plastic product prices, Fiscal policy of government encouraging imports ofinputs which are detrimental to Indian Plastic Industry, competition from otherleading manufacturers etc. continue to threaten the profitability ofyour Company. Competition, whether domestic or international, is always achallenge and transforming challenges into opportunities has been a practice at Vera Synthetic Limited.

D) SEGMENT WISE PERFORMANCE

The Company has only one segment. Performance of the same is given below inpoint H.

E) OUTLOOK

The Plastics Export Promotion Council (PLEXCONCIL) is the apex government body responsible for the promotion of plastic exports. PLEXCONCIL members comprise large-/medium-/small-scale manufacturers and exporters. The council supports exporters by participating in international trade fairs, exploring new markets, organising buyer- seller meets both in India and overseas, and engaging in various other promotion and need- based activities.

F) RISKS AND CONCERNS

In the winding plastic product business, the global demand and supply of fishing net and its pricesplays a vital role and could significantly affect your Companys turnover. YourCompany is fairly exposed to the domestic and global political and economic risks. The prices advanced on rapidly increasing demand for plastic products from China, India andthe other emerging economies of Asia. Your Company also continuously keepsworking on getting approvals from new and renowned customers to increase itsmarket share commensurate with its capacity. Intense competition in the market could affect our cost advantages and result indecreased turnover. Failure to complete fixed price, fixed time frame deliveriescould result in lower revenues of the company. The business of your Companycould suffer if we fail to anticipate and develop new products and enhance existingrange to keep pace with the rapid changes in the plastic industry. Currencyfluctuations could affect the results of operations. Your Companys manufacturing facilities are based in India. Any changes in the legal, fiscal and other regulatory regimes of our country could affect ourperformance. In the event that the Government of India brings about any changesin import tariffs in India and reduction or curtailment of income tax benefitsavailable to some of our operations in India can pose risks to your Company. It alsohas a wide customer base and changes in the legal, fiscal or regulatory regimes canalso affect the competitiveness of our product and affect your Companysperformance.

G) INTERNAL CONTROL SYSTEM

The Company has implemented internal control system at floor to shop level andwe believe that Internal controls and systems implemented are adequate. Theseare also reviewed periodically by the Board and efforts are made toimprove further, wherever possible.

H) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO

OPERATIONAL PERFORMANCE

Particulars Current Year Previous Year
2019-20 2018-19
Total Revenue from operations 335,723,418 342,042,910
Total Expenditure 311,994,610 322,360,551
Profit / (Loss) Before Tax 23,728,808 19,682,359
Provision for Taxation
(4) Current Tax 5,953,860 5,515,104
(5) Deferred Tax (768,132) 86,145
(6) Income-tax adj. of earlier years 74480
Profit / (Loss) after Tax 18,543,080 14,006,630
Earning Per Equity Share:
(3) Basic 3.76 2.84
(4) Diluted 3.76 2.84

Company has performed diligently and its EPS has been increased from 2.84 to 3.76

I HUMAN RESOURCES DEVELOPMENT

Training:

Training to employees at all levels is provided regularly to develop the knowledgeand skills. The management is fully committed to the development of its human resources. Your Company aims at providing in-class training to each employee. Every new recruit receives complete safety training and on the job training from hiscolleagues / supervisor. Functional and developmental training is provided fromtime-to-time to all employees to enhance their skills and productivity. There is anall round support from the management to the development of human resources.

Knowledge Management:

Vera Group has a practice of sharing experiences of one company with othergroup companies in various fields of production / finance / marketing. KnowledgeManagement is being developed by involving and sharing of information on key performance parameters at all levels which results in an overall improvement. Thishas been formalized by having a daily Business Meeting which is held at alllocations of the group companies.

Industrial Relations:

Your Company continues to maintain healthy and cordial industrial relations. Thevalues and the culture of the group foster family feelings amongst all itsemployees.The Companys employees strength as at 31st March, 2020 was 90.