alcobex metals ltd Management discussions

ALCOBEX METALS LIMITED ANNUAL REPORT 2009-2010 MANAGEMENT DISCUSSION AND ANALYSIS A. Industry Structure & Developments: Alcobex is a leading manufacturing company in India in manufacturing of extruded copper-based alloys such as pipes, tubes, solids, profiles and sections. The qualities of the companys products are well accepted in the international market. The quality is at par with international standard and due to this the export of the companys products is increasing and it had touched to Rs. 401.84 lacs during the year 2009-2010. B. Outlook: The qualities of the companys products are well accepted internationally and there is a good scope for higher export. The Company has been declared as sick unit by the Board of Industrial & Financial Reconstruction of the Sick Industrial Companies (Special Provision) Act 1985. BIFR at is meeting held on 2nd August, 2010 directed the company to deposit the Rs. 5 Crores with IDBI within One month and if the Company does not deposit said amount within the stipulated time, the IDBI could file the MA for change of management. The Company is making efforts to arrange for funds from the Strategic Investor and also will seek extension of time from BIFR for making such deposit, if necessary. C. Financial Performance: Because of inadequacy of working capital production as envisaged could not be achieved and the company incurred loss during the year 2009-10. D. Internal Control System: The company has a proper and adequate system of internal controls to provide reasonable assurance that all assets are safeguarded and protected against loss from unauthorized use or disposition and that transaction are authorized, recorded and reported correctly. An external firm of Chartered Accountants appointed by IDBI is conducting concurrent/internal audit according to terms and conditions mandated upon Said Financial institution. The reports of concurrent auditors are periodically reviewed by the Audit Committee, which includes independent and Nominee directors appointed by banks and financial institutions. E. Human Resources: Employees relations continued to be satisfactory during the year. F. Cautionary Statement: While the company formulates plans, prepares monthly and annual budgets based on certain assumptions and expectations and makes efforts to achieve the laid down targets, but actual results could differ materially from those expressed or implied. Important factors that could make a difference to the companys operations include economic conditions affecting global and domestic demand-supply, finished goods, prices in the domestic and overseas market in which the company operates, raw material cost and availability, changes in Government regulations, tax regimes economic developments within India and other factors such as litigation and industrial relations. The company assumes no responsibility to publicly amend modify or revise any forward looking statement on the basis of any subsequent developments, information or events.