Amal Ltd 2016-17

23 Management Discussion and Analysis The Company manufactures products based on Sulphur like 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, Fertiliser, Personal care, Petrochemical, Pharmaceutical, Textile, etc. These chemicals are generally sold locally and that too within a radius of 150 km from the manufacturing site. During 2016-17 sales increase by 11% from ` 2,583 lakhs to ` 2,867 lakhs. The current global demand for Sulphuric Acid is reported to be 210 mn mt per annum, assuming demand equals production and at an average growth of 4-5% per annum, the global demand for Sulphuric Acid is projected to be around 220 mn mt per annum by 2017 with Fertiliser industry contributing to 65% of the consumption. The manufacturing plant of the Company at Ankleshwar has an installed capacity of 140 mt per day. Optimising product mix is a key factor. 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 submitted the Modified Draft Rehabilitation Scheme (MDRS) covering the proposed merger to the BIFR through the Operating Agency for obtaining their approval on March 31, 2016. The Central Government vide notification dated November 26, 2016 notified the Sick Industrial Companies (Special Provisions) Repel Act, 2003 effective December 01, 2016. As a result, the BIFR and the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) were abolished and Sick Industrial Companies (Special Provisions) Act 1985 got repealed. Pursuant to aforesaid the proceedings or appeals whatever nature pending before the BIFR | AAIFR got abated. Consequently draft merger scheme pending approval of BIFR got abated. In this regard Board of Directors in its meeting held on March 24, 2017 decided not to proceed with Merger Scheme. 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 the Statutory as well as the 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 the Company to introduce best practices required to manage its business. Human Resources The Company believes that People are the foundation on which the business is built and it remains a key focus area. It 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 assessment by L+1; in addition, there are certain standard courses which everyone is expected to go through, depending upon his (her) grade.