Management Discussion and Analysis
The Company is expanding its capacity by adding a new BOPP Line of 40,000 MT at ShendraSEZ, in Aurangabad and is expected to be commissioned by March, 2013 for which the orderon equipment supplier have already been placed.
With the acquisition of GBC's Commercial Print Finishing business, the Company hasbecome the largest producer of thermal films in the world. Presently, the Company hasmanufacturing facilities in India, Korea, Netherlands & USA. It also has sales anddistribution set-ups across all the continents of the world. The capacity remained underutilized due to low demand in Europe & USA.
RISKS & CONCERN:
Key risks and concerns are:
a) The capacity additions in the industry, which are excess as compared to the increasein demand and the inability of the company to completely pass on the unpredictableincrease in raw materials costs due to competitive pressure may affect the operatingmargins, adversely.
b) Exposure to foreign exchange risks due to import of raw materials, exports &foreign currency loans may affect the EBIDTA, EBIT and PAT.
Cosmo's diversified product range & customer base (in domestic as well as exportsmarkets) and continuous emphasis on cost reduction; product innovation etc. provides it anedge over our competitors to mitigate the above risks.
The Company is also doing hedge of foreign exchange risks as and when deemed necessary.
OPERATIONAL & FINANCIAL PERFORMANCE:
The details of the financial performance are appearing in the financial statementsappearing separately in the financial statements. For highlights, please refer to theDirectors' Report & key ratios mentioned elsewhere in the Annual Report.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY:
The company has proper and adequate systems of internal control in order to ensure thatassets are safeguarded and transactions are duly authorized, recorded and reportedcorrectly. With the Implementation of SAP system internal control will get furtherreinforced through system based checks and controls.
Internal Audit function is being looked after by a professional firm of CharteredAccountants, which conducts audit of all units/locations. The statutory as well asInternal Auditors independently evaluate the adequacy of internal control system. Based onthe audit observations & suggestions, follow up & remedial measures are beingtaken on a regular basis.
HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONT:
The Company has well established Human Resources Department equipped to meet thepresent and future growth plans. There were 642 employees on the rolls of the company, ason March 31, 2012.
Industrial relations were cordial throughout the year at all locations. The unity ofpurpose to continuously strive for all round improvements in work practice &productivity is visible among all the employees.
Certain statements in the Management Discussion Analysis describing the company's viewsabout the Industry's expectations/predictions objectives etc. may be forward lookingwithin the applicable laws and regulations. Actual results may differ materially fromthose expressed in the statements. Company's operations may be affected with the demandand supply situations, input prices and their availability, changes in Governmentregulations, tax laws and other factors such as industrial relations and economicdevelopments etc. Investors should bear the above, in mind.