Amal Ltd 2012-13

07 Management Discussion & Analysis The Companymanufactures Sulphuric Acid,Oleum 25%, Sulphur Trioxide and Sulphur Dioxide at its manufacturing site at Ankleshwar. These are bulk chemicals which find their use in several industries like Dyes, Fertilizer, Personal Care, Petrochemical, Pharmaceutical, Textile, etc. These chemicals are generally sold locally and that toowithin a radius of 150 km fromthemanufacturing site. Sales for the year 2012-13 grew from 1,354 lacs to 1,716 lacs. The current global demand for Sulphuric Acid is reported to be 145 mn mt per annum, assuming demand equals production and at an average growth of 7-8% per annum, the global demand for Sulphuric Acid is projected tobe around 160 million mt per annum valued at US$ 11.98 bn by 2015* with Fertilizer industry contributing to 65% of the consumption.There are about 45 manufacturers of Sulphuric Acid in India accounting for 7.90 mn mt per annum of production. The western region accounts for 44%, followed by eastern region at 30%, southern region at 22%andnorthern region at 4%. The manufacturing plant of the Company at Ankleshwar has an installed capacity of 140 mt per day and effective steps have been taken to debottleneck the above capacity, the benefits of which will materialise in 2013-14. It will also be able to generate more steam which would be supplied to a neighbouring plant. In addition, it will also explore new value added products which will utilize Sulphur Trioxide and Sulphur Dioxide. Besides, the Company is also re-considering manufacture of a chemical intermediate used in thepharmaceutical industry. As the manufacture of the Sulphuric Acid and its downstream products are based on Sulphur, their prices and consequently their contribution margins are influenced by the international price of Sulphur and the rate of foreign exchange. The Company needs to ensure a high degree of efficiency, competitiveness and speed in its operations to achieve a goodperformance. ` ` Internal Control Systems HumanResources The Company has appointed an external agency, Aneja Associates, a reputed consultancy firm, to ensure adequate internal controls for safeguarding the assets, ensuring transactions are in accordance with its policies and are duly authorised, recorded and reported, and preventing significant frauds or other irregularities. The Company is working to further strengthen the systems for internal audit and risk assessment and mitigation. During the year, it has taken further steps to improve in these areas and has specifically taken the followingnew initiatives: (i) Internal Control System and procedures were audited by Aneja Associates and quarterly transactions audit was done by another chartered accountant firm Vimal D Desai & Associates (ii) Suggestions given by both the firms have been implemented. A high priority was assigned towards compliance to safety and environmental norms specified by GPCB. The Company continued with its drive to institutionalise and upgrade its HR processes. Production and sales activities of the Company have been streamlined at Ankleshwar and requisite manpower has been recruited to support the activities. Statements made in the Management Discussion & Analysis report relating to projections, estimates, expectations or predictions are based on certain assumptions. The Company cannot guarantee that these assumptions are accurate orwill be realised.The actual results, performance or achievements of the Company may thus differ materially from those estimatedorprojected.