Amal Ltd 2020-21

19 Management Discussion and Analysis The Company manufactures bulk chemicals such as sulphuric acid and oleum and their downstream products such as sulphur dioxide and sulphur trioxide at its manufacturing site at Ankleshwar. These chemicals find their use in several industries like Dyestuff, Fertiliser, Personal Care, Petrochemical, Pharmaceutical, Textile, etc. These chemicals are generally sold locally within a radius of 150 km from the manufacturing site. During 2020-21, due to the disruptions caused by the COVID-19 pandemic, sales and other income decreased by 8% from ` 3,434 lakhs to ` 3,166 lakhs. The world market for sulphuric acid is estimated at 266 mn mt per annum. Assuming demand equals production and is growing at about 3% per annum, the world market for sulphuric acid is projected to be about 275 mn mt per annum by 2022, with Fertiliser industry contributing up to 65% of the consumption. Themanufacturingplant of theCompanyatAnkleshwar has an installed capacity of 140 mt per day of sulphuric acid (including downstream products). Optimising the product mix is a key factor. The way to succeed in these products is to ensure high capacity utilisation, excellent conversion efficiency and full deployment of the by-product, steam. The Company incorporated a wholly-owned subsidiary namely, Amal Speciality Chemicals Ltd (ASCL), in 2020-21. ASCL will have a capacity to manufacture 300 mt per day of sulphuric acid (including downstream products). This will help the Company to have a higher market share. The products manufactured by the Company are commodity in nature whose prices and contributions fluctuate significantly. The price of the key raw material, sulphur, varies from month to month. The uncertainties associated with the COVID-19 pandemic may have adverse impact on the demand and supply chain in the short-term, and the Company is working to minimise the impact of such aberrations to sustain the operations and identify new opportunities to grow. 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 there on are reported to the senior management and Audit Committee for their review. The Company is working with reputed firms specialised 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 this remains a key focus area. It continued with its drive to institutionalise and upgrade HR processes. In particular, it focused on improving its processes related to recruitment, training and development, performance management and succession planning in order to manage a dynamic and growing business. The training needs are 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.