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 Technological development 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 GDP growth 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 margin contraction due to pricing pressure. Some of the larger global players are already present 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 of production, especially due to wage increase and rise in prices of other materials &services, short & stringent delivery schedule by customers in the background of highly volatile plastic product prices, Fiscal policy of government encouraging imports of inputs which are detrimental to Indian Plastic Industry, competition from other leading manufacturers etc. continue to threaten the profitability of your Company. Competition, whether domestic or international, is always a challenge 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 in point 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 prices plays a vital role and could significantly affect your Companys turnover. Your Company 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 and the other emerging economies of Asia. Your Company also continuously keeps working on getting approvals from new and renowned customers to increase its market share commensurate with its capacity.

Intense competition in the market could affect our cost advantages and result in decreased turnover. Failure to complete fixed price, fixed time frame deliveries could result in lower revenues of the company. The business of your Company could suffer if we fail to anticipate and develop new products and enhance existing range to keep pace with the rapid changes in the plastic industry. Currency fluctuations 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 our performance. In the event that the Government of India brings about any changes in import tariffs in India and reduction or curtailment of income tax benefits available to some of our operations in India can pose risks to your Company. It also has a wide customer base and changes in the legal, fiscal or regulatory regimes can also affect the competitiveness of our product and affect your Companys performance.

G) INTERNAL CONTROL SYSTEM

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

H) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Particulars Current Year Previous Year
2018-19 2017-18
Total Revenue from operations 342,042,910 223,540,344
Total Expenditure 322,360,551 208,160,081
Profit / (Loss) Before Tax 19,682,359 15,380,264
Provision for Taxation
(4) Current Tax 5,515,104 4,546,580
(5) Deferred Tax 86,145 187,144
(6) Income-tax adj. of earlier years 74480 93,828
Profit / (Loss) after Tax 14,006,630 10,552,712
Earning Per Equity Share:
(3) Basic 2.84 2.93
(4) Diluted 2.84 2.93

The Company earned operational income of Rs. 342,042,910.00/- compared to Rs.223,540,344.00/- in the previous year.

Profit after tax for the year under review is Rs. 14,006,630.00/-ascompared to previous year figure of Rs. 10,552,712.00/-

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.

Knowledge Management is being developed by involving and sharing of information on key performance parameters at all levels which results in an overall improvement.

This has 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.

The values and the culture of the group foster family feelings amongst all its employees. The Companys employees strength as at 31st March, 2019 was 96.