MANAGEMENT DISCUSSION AND ANALYSIS REPORT INTRODUCTION: The objective of this report is to brsent the Managements perception of the various developments in the business environment, challenges and opportunities before the Company as well as to provide an analysis of the Company's performance. This report also summarizes the Company's internal control measures and developments in the Human Resources front. It should be read in conjunction with the Directors Report to the Shareholders, Financial Statements and Notes thereon included elsewhere in this Annual Report. 1. INDUSTRY STRUCTURE AND DEVELOPMENT: ALUMINIUM FOIL:-There are around 09 Major Aluminum Foil manufacturers in India with rolling capacity of around 8000 tons per month to cater the total demand of around 10000 tons per month in different field of pharmaceuticals and flexible packaging industries. In the brsent scenario, market demand of the product is growing with a rate of 13% per annum. During the financial year 2014-15 AMCO's share in market has dropped drastically due to stiff competition in the market. PVCFILMS & SHEETINGS: -There are around 15 PVC Films & Sheeting's manufacturers in India. Demand for PVC Films & Sheetings is increasing with a rate of 18% p.a. approx. In our company there is no direct export of PVC Films & Sheeting's. 2. OPPORTUNITIES & THREATS, RISKS & CONCERNS: ALUMINIUM FOIL:- India is a known to be a growing market for Aluminium Foil industry. High cost of production, slower machinery can become a threat for the industry. But on focusing the brsent scenario, it can very well be seen that it was the entry of some large scale industries of Aluminium foils which spoiled the market by creating abundance of supplies with no increase in the actual demand of the products. PVC FILMS & SHEETINGS:- There is a growing market for PVC Films & Sheetings and Laminated Sheetings as it is used in different types of Industries such as electric tape, stationery, luggage, school belts for children, advertising banners, photographic albums, plastic panels for exhibitions and automobiles. The brsent threat we are getting is from Extrusion Process Industry. It comes under small scale industry in which they use low value machinery and produce poor quality PVC products. Further, more and more plain and printed PVC Sheetings & clear printed material is coming to India from China. 3. COMPANY'S PERFORMANCE (PRODUCT WISE): DOMESTIC BUSINESS REVIEW: ALUMINIUM FOIL:-The Company has executed orders for Pharmaceutical Industries, Packaging Industries, Automobile Industries etc. Your company share around 4% of the total market. The domestic sale has come down as compared to brvious year due to slack demand in the market. Due to the decrease in sales quantity of the products the factory of the Company situated at Bhiwadi was closed in December, 2013. The Company has decided to concentrate on Printing activity on Aluminium Foils for Pharma Industries, hence moved the Printing Lines from Bhiwadi to Baddi factory. PVC FILMS & SHEETINGS:- The Company has executed volume orders for the top Industries such as Auto Fit Pvt. Ltd., Meenakshi Polymers Pvt. Ltd., Bombay Plastic House etc. The domestic sale carries no more increase as compared with brvious year. Further, our laminated leather cloth is much in demand. Being a petroleum product, use of PVC resin, few plastic polymers, D.O.P, the increase in price has made a heavy impact on cost of our quality products. EXPORTS: In case of Aluminium Foil, the company's exports have increased during the year under review as compared to the brvious financial year. The continued strength of the US Dollar against Rupee did have its consequential impact on the outgo of foreign currency from India resulting thereby lesser surge in exports. 4. OUTLOOK: ALUMINIUM FOIL:- The Aluminium Foil industry is growing and carries opportunities for its growth. Also, the Global demand for aluminium foil is forecast to expand 8.7% p.a. between 2014 and 2018. China, Greece, Jordan, Morocco, and Turkey are considered the highest potential markets in the coming years. It also has potential to replace many non biodegradable products like Polyster, LD, HD, etc. Aluminium Foil is mainly used and brferred in packaging particularly in Pharmaceutical Industry. 50% of total capacity is consumed in this field. This product of company has wide applications in various areas, such as flexible packaging, food, chemical industry and Pharma sector. In Packaging industry, aluminum foil is gradually replacing polyester and other barrier films because aluminum foil have better berries properties then others. Our market share in Aluminium industry is negligible, but we have plans to consolidate our position in next two years as one of the top few companies, catering to the packaging needs of Pharma Companies. 5. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: The Company's internal control systems are geared towards ensuring adequate internal controls commensurate with the size and needs of the business, with the objective of efficient conduct of operations through adherence to the Company's policies, identifying areas of improvement, evaluating the reliability of Financial Statements, ensuring compliances with applicable laws and regulations and safeguarding of assets from unauthorized use. The Company has in place effective internal control systems to ensure that all assets are safeguarded and protected against unauthorized use and the transactions are authorized, recorded and reported correctly. Such controls also ensure optimization of operations, protection and conservation of resources and accuracy and timely reporting of financial information and compliance with all applicable laws and regulations. A regular Internal Audit System is also in place. The internal audit is carried out by a firm of professional auditors and the audit observations, if any, are acted upon periodically after their review by the Audit Committee. It reviews the internal audit reports and also addresses all aspects of the company's functioning as required under SEBI and Company Law Guidelines. 6. NEW PRODUCT DEVELOPMENT: The Gutkha and Pan Masala Packaging units, which have been hit by the Subrme Court's ban on use of plastic sachets for sale purposes, have found an alternate in paper and aluminum foil pouches .The Pan masala and Gutkha Industry witnesses an estimated business of Rs. 450 Crores every year in the country. Gutkha and Pan Masala is main leading product in flexible packaging industry and now Aluminum foil is being used for such product. Company has now been supplying Aluminium Foil in the market to big empires for Cigarette Foil Packaging, Milk Powder Packaging and for packaging of medical / surgical equipments. 7. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE: The detailed financial performance of the Aluminium Foil, PVC Films & Sheetings and Non Woven has been highlighted in the Annual report under the head Segmental Reporting. 8. HUMAN RESOURCES / INDUSTRIAL RELATIONS: The underlying rule of the company's policy towards human resources development is that competent and motivated manpower is the most important factor in achieving business goals. A systematic performance appraisal system is used for monitoring the performance of officers and staff at all levels. This exercise brings out achievements and shortcomings and helps in taking remedial measures for improving efficiency wherever necessary. Industrial relations remained cordial at all locations during the year. 9. BUSINESS INITIATIVES: The company has launched new initiatives for both its segments namely, to enter new markets, to increase production and sales of higher value added products. 10. MANAGEMENT'S PERCEPTION OF RISKS: The Company's exposure to Business, Assets and Financial Risks is stated as under. BUSINESS RISKS:- In case of all, Aluminum Foil, PVC Films & Sheetings, and Non Woven there is no business risks. ASSETS RISKS:- Assets risks includes threat to physical assets through accidents, natural calamities, etc. The company has suitable assets insurance policies so as to ensure maximum indemnity in the event of any loss. In addition, it has a system of continuous evaluation of insurance covers so as to cover conventional risks in an adequate manner as is commercially prudent. 11. APbrCIATION & DEbrCIATION OF RUPEE AGAINST US $: In case of Aluminium Foil, there has been not been any significant impact of currency fluctuation on the products sale in the market. 12. RESOURCES: MATERIAL:- In case of Aluminium Foil there is abundance deposits of bauxite in our country which make raw material to be easily assessed. In case of PVC Films & Sheetings, although the raw material used such as PVC resin, DOP, Stabiliser, filler are easily available, the company has faced difficulty due to unstable price of PVC resin. In the matter of Non Woven there are mainly two raw materials. First if PP Granules and the second is PP Pigment. There is no scarcity of any of these raw materials. CAPITAL:- The company needs more funds to meet its working capital and long term requirements to increase its production and sales. PVC FILMS & SHEETINGS:-Because of multiple use in different kinds of industries such as Automobile, Stationery, Luggage, Electric Tape etc. and the Fire Retardant Quality, the demand for PVC Films & Sheetings are increasing. 13. CAUTIONARY STATEMENT: As on 31.03.2015, the total numbers of employees on the payrolls of the company were 81. The Statements in the Boards' Report and the Management Discussion and Analysis may be forward looking within the meaning of the applicable securities laws and regulations. Actual results may differ materially from those exbrssed in the statement. Certain factors that could affect the Company's operations include increase in price of inputs, availability of raw materials, changes in government regulations, tax laws, economic conditions and other factors. For and on behalf of the Board of Directors SD/- Surender Kumar Gupta Chairman & MD DIN:00026609 SD/- Rajeev Gupta WTD &CFO DIN: 00025410 Add: C-53-54, Sector 57, Noida, U.P-201307 Place: Noida, U.P Date: 30.07.2015 |