MANAGEMENT DISCUSSION AND ANALYSIS The Company has two business segments viz. Food Processing and Constructions. The aforesaid business activities are supported by an extensive marketing network. 1. Industry Structure and Outlook In India, the domestic consumption behavior is undergoing a transformation and this change has been confirmed by an independent study initiated by the Company. These changes bode well for the Indian Frozen Foods industry where current penetration levels are substantially lower than other Asian countries. In terms of international competitiveness as a supplier, India has strong fundamentals. It has the world's second largest arable land and its climatic and soil diversity allows it to produce a host of tropical and exotic crops. Internationally trade in processed foods is growing and rebrsents 75% of global agricultural trade. In recognition of the above, the Government of India and select State Governments are offering a series of incentives to the industry for the establishment and expansion of food processing facilities and food chain. 2. Opportunities and Threats Frozen products offer a variety of benefits to consumers in terms of reduced time and labour costs, quality, product consistency, reduced brp- time, portion control, convenience, and avoidance of wastage, ease of storage, price stability and economics. The Foods Services Industry is an untapped segment of the market of the emerging frozen food market and brsents itself as a significant opportunity. The major threats to the industry arise out of backward integration of the emerging formats into private labeling, stringent food laws and stiff import duties of these products of importing countries and aggressive export pricing by China that can virtually block exports from India. 3. Risks and concerns The Food Processing Business is dependent upon an assured supply of quality raw materials at competitive and brdictable prices. Fluctuations in raw material prices and crop failures due to adverse climatic conditions brsent a business risk. Whilst the country boasts of a large and diverse supply of raw materials, horticulture production in the country is primarily targeted towards production for the wet market. The pace at which the horticulture practices transform is a concern. The products are stored and transported at sub - zero temperature and third party facilities are used extensively. Whilst a risk assessment is carried out in the selection and engagement of these third party facilities are used extensively, therefore the risks exist. 4. INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY The Company has an internal control system, commensurate with the size, scale and complexity of its operation, the scope and authority of the internal audit function is well defined in the organization. To maintain its objectivity and independence, internal audit function is laid before the Audit committee of the Board. Based on the report of the internal audit & Audit Committee observation, corrective actions are undertaken by the respective department and thereby strengthen the controls. 6. Human resources development and industrial relations The current strength of staff is 25. A higher than normal attrition rate was observed primarily on account of changes in the industry and the transformation. Industrial relations at the plant during the year were cordial. By order of the Board of Directors ANS Industries Limited Sd/- (Mehinder Sharma) Managing Director DIN: 00036252 Sd/- (S.R. Sahore) Director DIN: 00036146 Place: New Delhi Date: 24th August, 2015 |