Amal Ltd 2013-14

Amal Ltd | Annual Report 2013-14 Management Discussion and Analysis The Company manufactures Sulphuric Acid, Oleum 25%, Sulphur Trioxide and Sulphur Dioxide in its manufacturing site at Ankleshwar, Gujarat, India. These products are bulk chemicals which are used by customers mainly belonging to Dyes, Fertiliser, Personal Care, Petrochemical, Pharmaceutical and Textile industries and are generally sold locally within a radius of 150 km from the manufacturing site. During 2013-14, sales decreased by 5% from ` 1,699 lacs to ` 1,610 lacs. The current demand of Sulphuric Acid in India is estimated at 8 mn mt per annum and at an average growth of 7% per annum, the demand for Sulphuric Acid is projected to be about 8.6 mn mt per annum valued at ` 38 bn by 2015* with Fertiliser 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% and northern region at 4%. The manufacturing plant of the Company has an installed capacity of 140 mt per day. It will also be able to generate more steam which will be supplied to a neighbouring plant. In addition, it will also explore new value added products which will utilise Sulphur Trioxide and Sulphur Dioxide. 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 good performance. Internal Control Systems The Internal Control Systems of the Company are commensurate with the nature of its business and size and complexity of its operations. These are routinely tested, certified and upgraded wherever required by Statutory as well as Internal Auditors covering all key areas of business. Significant audit observations and follow up actions and recommendations thereon are reported to the higher Management and Audit Committee for their review. The Company is working with reputed firms specialising in internal audit function. The combined efforts are helping it to introduce best practices required to manage its business. Human Resources The Company continued with its drive to institutionalise and upgrade its HR processes. In particular, it focused on improving its processes relating to Performance Management (Training and Development, Key Initiatives: identification and review, Competencies, 360 degree feedback and fixed and variable pay). The training need is identified based on self assessment and L+1 assessment; in addition, there are certain standard courses which everyone is expected to go through, depending upon his (her) grade. The identification and review process of Key Initiatives has become more robust and is continuously upgraded. Statements made in the Management Discussion and Analysis report relating to projections, estimates, expectations or predictions are based on certain assumptions. The Company cannot guarantee that these assumptions are accurate or will be realised. The actual results, performance or achievements of the Company may thus differ materially from those estimated or projected.