Rasi Electrodes Ltd Management Discussions

A. lndustry structure and developments

YourCompany is operating in the Small Scale Industrial Sector having manufacturing plants forthe manufacture of Arc Welding Electrodes and Copper Coated Mild Steel (CCMS) Wire used forthe purpose of welding by the Engineering and Fabrication industries Your Company also trades in the entire range of welding products and accessories required by diverse industries in the heavy engineering and capital goods sector. Your Company trades by importing rutile, MIG-MAG Machine, Flux Core Wire and Flux on a regular basis. The demand for Companys products depends upon the robustness of demand in the engineering and capital goods industries in the Country.

B. Performance

During the year ended 31^st March 2017 the overall turnover of the Company was Rs 2684.05 lakhs as against Rs 2307.72 lakhs achieved during the last year resulting in an increase in the turnover to the extent of 16.31% when compared with the previous year. The production of welding electrodes was 1624.252 MTs as against 1706.137 MTs achieved during the previous year. The production of CCMS Wire during the year ended 31⁵¹ March 2017 was 1709.215 MTs as against 1505.512 MTs during the previous year.

During the yearended31^5,March 2017theprofitbeforetaxwasRs 140.82 lakhs (previous year Rs 169.52 lakhs) and after making aprovision for tax amounting to Rs 56.26 lakhs (previous year Rs 68.83 lakhs) (including provision for deferred tax), the profit after tax was Rs 84.56 lacs (previous year Rs 100.69 lakhs). The Profit aftertax has decreased by 16.02% during the year ended 31⁵¹ March 2017 when compared to the previous year.

The Company continues to comply with the certification requirements of Det Norkse Veritas Management System conforming to Quality Management System Standard ISO 9001:2008 for its manufacturing facility at Redhills, Chennai.

C. Segmentwise performance

Your company operates in the single segment i.e., manufacture and marketing of welding electrodes and as such the discussion of segment- wise performance is not applicable.

D. Concerns

The prospects of the company is closely connected with the performance of the capital goods sector. The infrastructure sector was experiencing stagnation during the whole of last year and as a result the performance of your company was also affected. The Company is hopeful that growth will pick up in the years to come.

E. Prospects and Outlook

Your Company was able to strengthen its brand image in the market with regards to the welding electrodes product. The CCMS Wire product produced by your Company has also received good response among the user industries. With a strong brand image, your companys product enjoys loyal patronage in the user market.

F. Internal control systems

Your company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposition.

G. Human resources and industrial relations

Your Company has well qualified and experienced technical, financial and administrative staff to cater to its business requirements. The relations with the employees of the company remained cordial throughout the year.