Annexure to the Boards Report: Annexure I
INTRODUCTION:
The management of Amco India Limited presents the analysis of performance of the
company for the financial year ended 31st March, 2023 and its outlook for the future. The
objective of this report is to present the Managements perception of the various
developments in the business environment, challenges and opportunities before the Company
as well as to provide an analysis of the Companys performance. This report also
summarizes the Companys internal control measures and developments in the Human Resources
front. The outlook is based on assessment of the current business environment and thus the
Companys actual results, performance or achievements could differ from those projected in
any forward-looking statements.
1. INDUSTRY STRUCTURE AND DEVELOPMENT:
ALUMINIUM FOIL: There are many major Aluminum Foil manufacturers in India who
caters the total demand of the product in different fields of pharmaceuticals and flexible
packaging industries. India is one of the key producers of aluminium foil, with over 70%
of it is used in packaging applications in industries such as pharmaceuticals, beverages,
personal care, food and non-food products. The growth of the industry has been strong in
the recent past owing to the growing application of foil in a variety of products.
However, the factors like stiff competition, increase in prices of raw materials and other
related factors have impacted the market situations otherwise.
PVC FILMS & SHEETINGS: There are around dozen PVC Films & Sheetings
manufacturers in India. It is used in different applications such as cable and wire
insulation, medical devices, frinage pipes, window frames, automotive interiors and seat
coverings, packaging, credit cards, vinyl records, fashion and footwear and other coated
fabrics. The demand for PVC Films & sheetings is increasing with a rate of 15% per
annum approximately.
2. OPPORTUNITIES & THREATS, RISKS & CONCERNS:
ALUMINIUM FOIL: India is known to be a growing market for Aluminium Foil industry.
High cost of production, slower machinery can become a threat for the industry and entry
of some large scale industries of Aluminium foils which spoiled the market by creating
abundance of supplies with no equivalent increase on the demand side of products. The
Company expects improvement in demand of indigenous foil due to capacity increase by
pharmaceuticals companies in future. Indias aluminium foil packaging market size was
valued at USD 3 billion in 2021 and is expected to reach USD 4.2 billion by 2029, at a
CAGR of 4.5% from 2022 to 2029.
PVC FILMS & SHEETINGS: PVC films and sheets are used in packaging industry
because it has high versatility, recyclability and favorable environmental footprint. The
market size of PVC films and sheetings by financial year 2032 is expected to be 6.1
million tonnes and the growth rate is expected to be CAGR of 7.11% from financial year
2023 to financial year 2032.
3. COMPANYS PERFORMANCE (PRODUCT WISE):
ALUMINIUM FOIL: The Company has executed orders for Pharmaceutical Industries,
Packaging Industries, Automobile Industries etc. The total revenue of the Company from
Aluminium Foil during the financial year under review i.e 2022-23 is INR 8,95,000.30
thousands as against the revenue of INR 10,63,739.51 thousands during the previous
financial year 2021-22.
PVC FILMS & SHEETINGS: The performance in the PVC Films & Sheetings segment
has shown a downfall during the year under review. The revenue from PVC films &
Sheetings for the financial year 2022-23 is INR 2,932.68 thousands against the revenue of
the financial previous year 2021-22 which was INR 6,638.36 thousands.
4. OUTLOOK:
The Aluminium Foil has potential to replace many non bio-degradable products like
Polyster, LD, HD, etc. Aluminium Foil is mainly used and preferred in packaging
particularly in Pharmaceutical Industry. India is considered to be one of the key
producers of aluminum foil in the region. This product of company has wide applications in
various areas, such as flexible packaging, food, chemical industry and Pharma sector. In
Packaging industry, aluminum foil is gradually replacing polyester & other barrier
films because aluminum foil have better barrier properties than others. The change in food
habits due to a busy lifestyle, growing demand for ready to eat confectionaries &
pharmaceutical products has increased the demand for this industry.
Due to improvement in industrial environment and implementation of new policies we are
hopeful of good growth in domestic and international market of drugs & pharma
resulting in capacity increase in pharmaceutical products and foil consumption.
We have plans to consolidate our position in next few years as one of the top few
companies, catering to the packaging needs of Pharma Companies. Further, the Company is
highly keen in focusing more in the production of the Aluminium foils and coating of
Aluminium foil and the management of the Company has decided to take the relevant steps in
the said regard.
5. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Amco India Limited manages, monitors and reports on the principal risks and
uncertainties that can impact its ability to achieve its strategic objectives. The
Companys risk management framework encompasses internal control in an integrated manner
and is tailored to the specific segments of Amco India Limited, businesses and functions.
It takes into account various factors such as the size and nature of the inherent risks
and the regulatory environment of the individual business segment or operating company.
The Company has an adequate system of internal controls implemented by the management
towards achieving efficiency in operations, optimum utilization of companys resources and
effective monitoring thereof and compliance with applicable laws and regulations.
Amco India Limited recognizes that the risks associated with the business need to be
managed to protect its customers, employees, shareholders and other stakeholders in the
society to achieve its business objectives and enable sustainable growth. As part of its
risk management process, Amco India Ltd reviews plan related risks, opportunities and
uncertainties. It identifies those as having a high priority for particular oversight by
the Board and its various committees. The Audit Committee of the Board of Directors also
periodically reviews audit plans, external auditor observations and recommendations,
significant risk area assessments and adequacy of internal controls.
The Companys internal control systems are geared towards ensuring adequate internal
controls commensurate with the size and needs of the business, with the objective of
efficient conduct of operations through adherence to the Companys policies, identifying
areas of improvement, evaluating the reliability of Financial Statements, ensuring
compliances with applicable laws and regulations and safeguarding of assets from
unauthorized use.
A regular Internal Audit System is also in place. The internal audit is carried out by
a firm of professional auditors and the audit observations, if any, are acted upon
periodically after their review by the Audit Committee. It reviews the internal audit
reports and also addresses all aspects of the companys functioning as required under SEBI
and Company Law Guidelines.
6. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:
Amco India Limited is focused on securing liquidity and capital for its businesses. It
makes sure that the capital is made available at the optimum risk adjusted cost and is
made available at the time when businesses require it. The detailed financial performance
of the Aluminium Foil and PVC Films & Sheetings has been highlighted in the Annual
report under the head Segmental Reporting.
7. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS:
It is your companys belief that people are at the heart of corporate & constitute
the primary source of sustainable competitive advantage. The human resource philosophy and
strategy of your Company is to attract and retain the best talent and to create a
responsive and market driven organization. Your company continues its focus on
strengthening competitiveness in all its business. Thus, with a strong, able and loyal
manpower base, your Directors look forward to the future with confidence and optimism.
During the year under review the number of permanent employees on the rolls of Company
were 62.
The Company continues to transform its human resource management. The company has
followed a conscious policy of providing training to Management Staff through in-house and
external programme, for upgrading personal and technical skills in relevant areas of
functional disciplines. The industrial relations remained cordial at all locations during
the year.
8. SIGNIFICANT CHANGES:
The changes in the Key Financial Ratios of the Company during the year are provided
below.
| Particulars |
Current FY 2022-23 |
Previous FY 2021-22 |
YoY Change(%) |
Reason for change |
| Current Ratio |
1.56 |
1.56 |
0.00 |
There has been no significant change in the ratio. |
| Debtor Turnover Ratio |
11.30 |
10.97 |
3.01% |
There has been no significant change in the ratio. |
| Inventory Turnover Ratio |
9.77 |
12.15 |
-19.55 |
There has been no significant change in the ratio. |
| Debt Equity Ratio |
0.43 |
0.49 |
-12.24 |
There has been no significant change in the ratio. |
| Return on Equity Ratio |
1.65 |
12.59 |
-86.86 |
The ratio has reduced due to fall in earnings in business operations in FY 2022-23. |
| Interest Coverage Ratio |
2.84 |
7.91 |
-64.06% |
The ratio has reduced due to fall in earnings in business operations & interest
expenses in FY 2022-23. |
| Operating Profit Margin Ratio |
0.36 |
3.27 |
-88.99% |
The ratio has reduced due to fall in earnings in business operations in FY 2022-23. |
| Return on Net Worth |
6.05 |
20.06 |
-70.15% |
The ratio has reduced due to fall in earnings in business operations in FY 2022-23. |
| Net Profit Ratio |
0.43 |
2.51 |
-83.03 |
The ratio has reduced due to fall in earnings in business operations in FY 2022-23. |
9. NEW PRODUCT DEVELOPMENT:
The Gutkha and Pan Masala is main leading product in flexible packaging industry and
now Aluminum foil is being used for such product.
The Company has now been supplying Aluminium Foil in the market to big companies for
Cigarette Foil Packaging, Milk Powder Packaging and for packaging of medical / surgical
equipments.
10. BUSINESS INITIATIVES:
Amco India Limited aims at delivering superior performance in todays volatile and
global environment which requires sound strategy and disciplined execution. Accordingly,
the company has launched new initiatives for both its segments namely, Aluminium Foil
& PVC Films/Sheetings to enter new markets, to increase production and sales of higher
value added products.
11. MANAGEMENTS PERCEPTION OF RISKS:
The Companys exposure to Business, Assets and Financial Risks is stated below:
BUSINESS RISKS: In case of all, Aluminium Foil, PVC Films & Sheetings, the
business risk includes market conditions, changes in import duties, high cost of raw
materials.
ASSETS RISKS: Assets risks includes threat to physical assets through accidents,
natural calamities, etc. The company has suitable assets insurance policies so as to
ensure maximum indemnity in the event of any loss. In addition, it has a system of
continuous evaluation of insurance covers so as to cover conventional risks in an adequate
manner as is commercially prudent.
12. APPRECIATION & DEPRECIATION OF RUPEE AGAINST US $:
In case of Aluminium Foil, the currency fluctuation had significant impact on the
products sale in the market.
13. RESOURCES:
MATERIAL: In case of Aluminium Foil there are abundance deposits of bauxite in our
country which make raw material to be easily assessed. In case of PVC Films &
Sheetings, although the raw material used such as PVC resin, DOP, Stabiliser, filler are
easily available, the company has faced difficulty due to unstable price of PVC resin. In
the matter of Non Woven there are mainly two raw materials. First is PP Granules and the
second is PP Pigment. There is no scarcity of any of these raw materials.
CAPITAL: The company needs more funds to meet its working capital and long term
requirements to increase its production and sales.
PVC FILMS & SHEETINGS: Because of multiple uses in different kinds of
industries such as Automobile, Stationery, Luggage, Electric Tape etc. and the Fire
Retardant Quality, the demand for PVC Films & Sheetings are increasing.
14. CAUTIONARY STATEMENT:
The statements in the Management Discussion and Analysis describing the Companys
objectives, expectations or predictions may be forward looking within the meaning of
applicable securities, law and regulations. Actual results may differ materially from
those expressed in the statement. Important factors that could influence the Companys
operations include global and domestic supply and demand conditions affecting selling
prices of finished goods, input availability and prices, changes in government
regulations, tax laws, economic developments within the country and outside the country
and other factors such as litigation and industrial relations.
| Place: Noida, U.P |
For and on behalf of the Board of Directors |
| Date: 22.08.2023 |
|
| sd/- |
sd/- |
| Surender Kumar Gupta |
Rajeev Gupta |
| Chairman & MD |
Whole Time Director |
| DIN: 00026609 |
DIN: 00025410 |
| Add: C-53-54, Sector 57, |
Add: C-53-54, Sector 57, |
| Noida, U.P-201301 |
Noida, U.P-201301 |
+91-9892691696
