MANAGEMENT DISCUSSION AND ANALYSIS REPORT
INDUSTRY STRUCTURE AND DEVELOPMENT
India's plastic industry is projected to grow at estimated rate of 15% in the comingyears. The PVC pipes business is driven in large measure by demand for pipes used inagriculture and irrigation sector, constructions and upcoming infrastructure projects. Theunion budget for 2012-13 has increased allocation for agriculture and irrigation. Thetarget for agriculture credit has been raised by Rs. 100000 crores to Rs. 575000 crores.Central government is also mobilising funds for irrigation projects. All the above factorswill be helpful for industry to grow.
Your Company foresees good growth opportunities in the irrigation and agriculturalsector. The positive trend in demand is expected to continue in the coming years, due toincreased focus by the government on agriculture, construction and infrastructuredevelopment projects.
The pipe industry is highly Raw Material (RM) intensive with the RM cost accounts formore than 70-80% of the total cost. The industry relies heavily on imports with associatedforex fluctuation risk.
Local / unrecognised sector creating stiff competition by offering lower rates &compromising in quality aspects of products.
The company is conscious of its brand value and enhancing it by offering newer andbetter quality products, advertising and promotions.The company has introduced new rangeof accessories for the piping system. It also has facilities for producing a variety ofPVC/HDPE fittings. Company is increasing its customers base in agriculture and buildingsector. Company has created seperate verticals for irrigation , building products, MIS andInstitutional sales through expanded marketing network in identified focus areas.
The financial statements are prepared in compliance with the Companies Act, 1956 and asper the generally accepted accounting principles, policies and practices prevalent inIndia. The Company's financial performance is discussed in details under the head"Financial Results" in Directors' Report to the Members.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The internal control system of the company is in place and is commensurate with thesize & scale of its operations. The Internal Audit department with the help ofexternal agencies & based on risk asessment, regularly performs internal audits &ensure the effectiveness of internal control systems.
The company has implemented suitable controls on ongoing basis to assure that allresources are utilized optimally, financial transactions are reported with the accuracyand all applicable laws and regulations are strictly complied with. The audit findings arereviewed by the Audit Committee of the Board and corrective actions as deemed necessaryare taken.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
Your company's Industrial relations continued to be harmonious during the year underreview. The company continue to invest in people through various initiatives which enablethe work force to meet out the production requirements and challenges related thereto andto infuse positive enthusiasm towards the organization.
Estimates and expectations stated in this Management Discussion and Analysis Report maybe "forward-looking statements" within the meaning of applicable securities,laws and regulations. Actual results could differ materially from those expressed orimplied. Important factors that could make a difference to your Company's operationsinclude economic conditions affecting demand/ supply and price conditions in the domesticand international markets, changes in the Government regulations, tax laws, and otherstatutes and incidental factors.