K Dhandapani & Co Ltd Management Discussions

K.DHANDAPANI AND COMPANY LIMITED ANNUAL REPORT 2008-2009 MANAGEMENT DISCUSSION AND ANALYSIS Overview: The ever increasing multinational presence is continued to drive the domestic companies across all segments to re-engineer growth. Thinning margins is compelling huge volume of growth, to remain profitable. Your company envisaged, has grown in volume by expanding its retail businesses. There is a dip in the sales turnover of Rs.3.47 due to the recessionary trend in the industry as a whole. The Company is confident of posting better performance in the ensuing year. Industry Developments: Power and infrastructure being priority for economic growth, your company is confident of converting the opportunity to overtake in these areas, and grow in size. Operating & Financial Performance: During the year under review, there was a decrease in gross sales from Rs.42.77 crores during the previous year to Rs.39.30 crores during the current year. Even though the operating margins continue to be under pressure your company was able to post a healthy profit before tax of Rs.37.22 lakhs. Internal Audit and Compliance: The company has an agency to carry out the internal audit and report on all operational parameters. The internal control procedures are in place. An audit committee is set up to report to the Board on a regular basis whose terms of reference include the following: a) To hold periodic discussions with the Statutory Auditors and Internal Auditors of the company concerning the accounts of the company, internal control systems, scope of audit and observations of the Auditors/Internal Auditors. b) To review compliance with internal control systems. c) To review the quarterly, half yearly and annual financial results of the company before submission to the Board. d) To investigate into any matter in relation to items specified in section 292A of the Companies Act, 1956, or as may be referred to it by the Board and for this purpose to seek any relevant information contained in the records of the company and also seek external professional advice, if necessary. e) To make recommendations to the Board on any matter relating to the financial management of the company, including the Audit Report. Risk Management: In view of the conservative approach of your company, it would be possible for the company to insulate itself from normal business risks. A credit appraisal system is in place to ensure that credit exposure is taken after detailed appraisal of the customer. Human Resources: Your Company has highly motivated people at different levels to oversee the operations. Your Company also has a well placed training and development division for the new recruits. Your company has cordial relationship with the employees at all levels.