MANAGEMENT DISCUSSION AND ANALYSIS OVERVIEW OF THE ECONOMY The global economy during the year under review has witnessed uncertainty due to various events occurred during the year. The Indian economy in the year 2014-15 has emerged as one of the largest economies with a promising economic outlook on the back of controlled inflation, rise in domestic demand, increase in investments, decline in oil prices and reforms among others. BUSINESS OVERVIEW Amines & Plasticizers Ltd. (APL) is one of the largest producers of Alkyl Alkanolamines, Alkyl Morpholines, Morpholine derivatives, Gas Treating Specialty solvents, Ethoxylates, Propoxylates, Polyols based Triols, Terols, Oil Field Chemicals etc. which find wide applications in Oil Refineries, Gas Plants, Agro Chemical Industries, Pharmaceutricals, Oil Field industries etc. The main product, Methyl Diethanolamine (MDEA) is used as a Sour Gas Sweetening solvent to absorb acidic gases with considerable energy savings. The Company exports its products to countries located in Middle East, South East Asia, Europe, China, Russia, United States of America, Canada etc. SUBSIDIARY COMPANIES PROGRESS: The proposed amalgamation of APL Engineering Services Private Limited, wholly owned subsidiary of the Company is in its final stages. Both the Transferor and the Transferee Companies are Group Companies and the proposed Amalgamation would result in business synergy and consolidation of business activities of these companies. The Company had taken all necessary steps in order to expedite the process. The Company had received observation letter from the Bombay Stock Exchange (BSE) dated 26.06.2013. The Company had moved applications in Guwahati High Court for confirmation of the petition. The Bombay High Court has passed order confirming the petition filed by APL Engineering Services Pvt Ltd on 4th July, 2015. As reported earlier, APL Engineering Services Private Ltd. is fully operational and is receiving good orders and executing the same for its clients through various Engineering Companies. The jobs have been satisfactorily completed and delivered to their customers. APL Engineering Services Private Ltd. is also undertaking Fabrication of various products for the Parent Company, Amines & Plasticizers Ltd. The order book position is satisfactory. APL Infotech Ltd. continues its association for marketing of its Pipe Leak Detection Software in Domestic as well as in International markets with one of the largest software companies in India. The Company is in talks with various Gas Transportation Companies in India for installation of its software on their cross country gas transportation. Since this type of software is being developed for the first time in India, marketing of the same is time consuming and we expect good results in future as gas transportation will be in great demand in the Country as per Budget proposals. ISO COMPLIANCE: As reported earlier, the Company has following ISO Certifications in place : - ISO 9001:2008 certification valid till 13th January, 2016. - ISO 14001:2004 certification valid up to 9th April 2016 - OHSAS 18001:2007 certification valid up to 9th April 2016. Further, a detailed note on the same is included in the Directors' Report. RS (Responsible Sourcing): APL has become a Member in SEDEX website after going through SMETA 4-Pillar Audit conducted by DNV. The Membership is renewed for continuation of SEDEX. SEDEX is an online database that enables suppliers to share information with their customers on their responsible trading practices (Health, Safety, Labor Standards, the Environment and Business Ethics). GREEN INITIATIVE: The Company had earlier through various modes has tried to create awareness amongst the shareholders regarding the Green Initiative to save the papers and protect the environment. With a view to achieve this the shareholders can opt for receiving all correspondences through electronic mode by registering their e-mail addresses with Sharepro Services (I) Pvt Ltd., Mumbai in case shares are held in physical form and with their depositories where shares are held in demat form.. The Annual Report of the Company and all major corporate communications would also be uploaded on the Company's website: www.amines.com for information and perusal. We seek your whole hearted support for this initiative. We would request you to register your e-mail ID as mentioned above to get annual reports and other communications through e-mail instead of paper mode. E-voting The Companies Act, 2013 read with rules made there under has made it mandatory for every listed company or a company having not less than one thousand shareholders to provide its members facility to exercise their right to vote at the General meetings by electronic means. In order to provide electronic voting facility to its members the Company has entered into agreement with the Central Depository Services Limited (CDSL). The facility of E-voting can be availed by all the shareholders having their shares in dematerialized form as well as in physical form. In case of shares held in physical form : Shareholders should provide their e-mail ID to the Company or to Registrar and Share Transfer Agents for opting to receive notices/documents electronically. In case of shares held in electronic form: Shareholders who have not registered their e-mail addresses so far are requested to register their e-mail addresses in respect of electronic holding with the Depository through their concerned Depository Participants. All shareholders are further requested to ensure that registered E-mail Id with the Depository should be current and active to receive notices/documents electronically. INDUSTRY STRUCTURE AND DEVELOPMENT: The Indian economy grew at 7.3 per cent in 2014-15 due to improvement in the performance of both services as well as manufacturing sectors. During the year under review the economy was in its recovery mode with a promising future ahead. The global slowdown however, has affected the growth slightly by putting a direct impact on exports. COMPANY'S FINANCIAL PERFOMANCE During the year under review the income from sale of products increased from Rs. 25976.26 Lacs to Rs. 32057.18 Lacs registering a growth of almost 19% over the brvious year. Export comprises of 40% of the total sale of products. During the year under review, the aggregate net revenue of the Company was Rs. 30085.69 Lacs and profit before tax stood at Rs. 1151.32 Lacs. The Company has achieved a rise in total revenue by 23.5% and 11.5% in Exports over the brvious year. The Company's products are mainly exported to Middle East, Europe, USA, Korea and China. The acceptability of the Company products has enabled the Company to put up an improved performance during the year under review. PRODUCTWISE PERFORMANCE The Company has focused more on consolidating its products strength. All the products range so developed and marketed by the Company have been well accepted domestically and globally. The Company has expanded its wing in different parts of the world and added new customers during the year. MDEA is the main product manufactured by the Company along with its Gas Treating specialty solvents which is marketed worldwide and in India. The Management is proud to say that majority of the Refineries in India are using our product. The Company has started new range of Oil Field chemicals which are in developmental stage to cater to the needs of various Oil Drilling companies. The Company has also tied up with a reputed International Company for its products. It is the Management endeavour to extend it further during the current Financial Year. The Company's other main product NMMO, which is used as a solvent in the production of new generation viscose fibres and pharmaceutical intermediaries has been garnering major revenue and is expected to continue to do so in the current year. Keeping in mind the global requirements, the Company has developed its Carbon Capture solvent, which is being shortly put in to trials with a reputed international plant during the current Financial Year. Once its trials are established, more extensive marketing for the same would be done. RESEARCH AND DEVELOPMENT PROGRAMMES: The Company's R & D strategy and long term targets are formulated in such a manner that it allies with our company objectives in achieving financial goals and business sustainability in light of fast-changing environmental legislation, market dynamics and global competition. R & D activities are focused on quality optimization efforts and cost reduction programme in the existing operations, besides speciality product development. Keeping these objectives, R & D efforts of last year, in the field of 'Oil Field Chemicals' and 'Construction Chemicals, such as 'Cement Additives', has helped the company's foray into these competitive fields. We already have an established market in the field of "Gas Treating" of Natural Gas, Refinery Gases and Synthesis Gas (Ammonia , Hydrogen production) for the removal of H2S ( Hydrogen Sulfide) ,CO2 ( Carbondi oxide), with our Specialty Gas Treating Solvents, based on formulated Methyldiethanolamine ( MDEA) and serving units of these nature all over the world. For a MNC major in Oil & Gas, we have a developed " SO2 ( Sulfured oxide) Absorbent " too, based on their interaction with our R &D, controlling the impurities to bare minimum, exported the same and recently obtained repeat order. " Shale Gas" exploration in India is yet to pick up and we are already working on "Gas Treating Agents' for the same. Another matter of importance in this field is " CO2 capture", in order to reduce greenhouse gas emission to brvent global warming and our Speciality Gas Treating Agent in this field is already on trials at few places with encouraging results. Quality optimization efforts in 'drug Intermediates and 'cosmetic ingredients with R & D inputs, resulted in repeat orders not only from domestic Pharma majors but also from Cosmetics & Pharma MNCs, in Canada, Europe Middle East, Africa and South East Asia. The Company is also contributing to booming automobile industry, in unique products, used as 'mold releasing agents' in rubber related auxiliaries. OPPORTUNITIES, THREATS, RISKS AND CONCERNS: The volatility in the world economies brings along with it various risks affecting the business. The Company has been taking very conservative steps in order to mitigate the effects of unstable global conditions. The Company has always endeavored to achieve higher consumer satisfaction by innovation, quality improvement etc. The research and development team of the Company comprises of professionals in the field who constantly works upon development of new products, simulations, process and development of existing ones. The Company faces competition from various domestic as well as international players. INTERNAL CONTROL SYSTEM The Company has instituted adequate internal controls to ensure that transactions are properly recorded, authorized and reported apart from safeguarding its assets. The Company's internal control system is supplemented by well-developed operating procedures, policies, guidelines and review carried out by the Internal Audit function. The Audit Committee of the Company reviews the adequacy and effectiveness of the internal control of the Company and suggests improvement to strengthen the Company's risk management policies and systems. HUMAN RESOURCE MANAGEMENT One of most important resource in the growth of an Organization is the Human talent. The human resource of the Company comprises of young talent and experience. The work force of the organization is a key factor helping the Company achieve success. The Company's policy of rewarding its employees proportionately as per their contribution has been a motivational factor over the years. Also, the Company encourages the development of its employees through various internal and external training and awareness programmes. During the year the Company has 159 employees. The management places on record its apbrciation for the dedication and commitment of its employees at all levels. FINANCIAL PERFORMANCE The Company has improved its performance during the current year. The efficient utilization of existing capacities, and introduction of new specialized products had helped the Company to improve its performance during the year. The comparative financial results for the years 2014-2015 and 2013-2014 are as shown below: As depicted in the table above, during the year under review the Total Revenue of the Company rose by 23.5% whereas the Profit before tax rose by 60%. The Company's expenditure outgo was Rs. 27768.50 Lacs in the year under review as compared to Rs. 22539.85 Lacs in the brvious year. The Earnings before Interest, Tax and Debrciation rose by 27% during the year under review. SAFE HARBOUR CLAUSE A safe harbour is a provision of a statute or a regulation that specifies that certain conduct will be deemed not to violate a given rule. This report describing of the Company's activities, objectives, projections, estimates, expectations or brdictions may contain certain "forward-looking statements" within the meaning of applicable laws and regulations. The actual results may differ from those exbrssed or implied due to various risk factor and uncertainties. These risk factors and uncertainties include the effect of domestic as well as global economic and political events, volatility in interest rates and in the securities market, change in the government policies may affect our Company's businesses as well as implementation strategies. Thus, the Company undertakes no obligation to publicly amend, modify or revise any forward looking statements on the basis of any new information, subsequent development, future events or otherwise. Subject to this management disclaimer, this discussion and analysis should be perused |
