AMD Industries Ltd Management Discussions.
Industry Structure & Developments
The global PET bottle market reached a volume of more than 17 Million Tons in 2018, registering a CAGR of more than 2.3% during 2011-2018. The market is further projected to reach a volume of nearly 19 Million Tons by 2024, at a CAGR of nearly 2.1% during 2019-2024. Polyethylene terephthalate (PET) refers to a thermoplastic polymer resin of the polyester family which is widely used for manufacturing plastic bottles. In comparison with PP, HDPE and PVC bottles, PET bottles are more durable, transparent, lightweight, non-reactive, cost-effective and thermally stable. Moreover, they are environment-friendly and can be recycled repeatedly which further reduces their manufacturing cost. Primarily used in the packaging of drinking water and beverages, PET bottles are also gaining prominence as a packaging solution for salad dressings, household cleaners, medicines, dish detergents and mouthwashes
Plastic is used heavily for packaging owing to its innovative visual appeal for customer attraction and convenience. The growth in lifestyle and consumption patterns has increased the demand for the packaged products resulting in growth packaging industry.
The Indian packaging industry has made a mark with its exports that comprise flattened cans, printed sheets and components, crown cork, lug caps, plastic film laminates, craft paper, paper board and packaging machinery, while the imports include tinplate, coating and lining compounds and others. In India, the fastest growing packaging segments are laminates and flexible packaging, especially PET and woven sacks. Over the last few years Packaging Industry is an important sector driving technology and innovation growth in the country and adding value to the various manufacturing sectors including agriculture and FMCG segments.
The recent 30 per cent drop in crude oil prices will benefit many companies from the industry, as plastic is derived from petroleum refining products. Lower the cost of oil, lower is the cost of plastic raw materials used for packaging purpose. To note, the Indian packaging industry has registered a robust growth of 15% CAGR in the last five years and is estimated to achieve $32 billion annual turnover by 2025.
Real Esate Market
The real estate sector is one of the most globally recognized sectors. Real estate sector comprises four sub sectors - housing, retail, hospitality, and commercial.
The growth of this sector is well complemented by the growth of the corporate environment and the demand for office space as well as urban and semi-urban accommodations. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy
The Indian real estate sector has witnessed high growth in recent times with the rise in demand for office as well as residential spaces. Private Equity and Venture Capital investments in the sector have reached US$ 1.47 billion between Jan-Mar 2019. Institutional investments in Indias real estate are expected to reach US$
5.5 billion for 2018, the highest in a decade
Segment-wise or product-wise performance
Your Company manufactures Crown Caps which are mainly used as metallic closures for various edible items packed in glass bottles e.g. Carbonated Soft Drinks, Fruit Juices, Milk products, Beer etc. The use of glass bottles has been seen steady or little bit de-growth whereby the use of Returnable Glass Bottle (RGB) has been seen in reducing trends.
The plastic closure market has been continuously getting its momentum due to increased usage of PET Bottles. The sales of Closures were almost flat during the year against last year.
Outlook, Opportunities & Threats, Risk and Concerns
The beauty of our country lies in its democracy and the tremendous opportunities that it brings. Your Company has a very clear vision and strategic plan to capture the latest happenings and trends in the industry and align with them to gain maximum advantage from it. This is, perhaps, the reason why Manjushree continues to grow by leaps and bounds year after year and maintain its market leadership.
On one hand where democracy brings opportunities, it also induces fiercely heavy competition, and your Company is not exclusion of it. The very unstable economy brings huge amount of foreignexchangefluctuationand volatility in Raw Material Prices, which are capable of eroding away the major stack of profits of the Company.
Add to this is the extreme misery of having un-skilled manpower. These threats are being carefully examined and solutions are being derived thereof. Centralized operations, implementation of ERP systems and training and development of personnel are being continuously undertaken to make sure that your company stays ahead of the curve and is able to wad of such threats.
During the year under review, there is a minor improvement in performance of revenue from operation against last year which over all, Revenue increased by 6.94%. Revenue from operations increased by 7.35% jobwork by 14.08% and sale of product by 9.80%. So the overall sales of product including Job work increased by approx 6.38%.
The Company has adequate internal control system commensurate with the size of the company. The Company has appointed M/s B. L. Khandelwal & Co.,
Chartered Accountants, New Delhi, as the Internal Auditor of the Company to carry out the internal audit at regular intervals. The internal audit reports along with action taken reports thereon are reviewed by the Audit Committee.
Material Development in Terms of Human Resources / Industrial Relations front, including number of people employed.
Human Resources are considered to be a form of capital and wealth of the Company. The growth of the Company and improvement in the systems has been sustained by the active involvement of the employees with the Management. It has been the focus of the management to improve and expand the contribution of its human resources towards attainment of organizational goals and values. The technical expertise of the Management has been shared with the employees at the works, which keeps them motivated to meet and surpass the set targets. The company employed 253 numbers of on Roll employees during the year.
Details of Changes in key financial ratio and in Return on Net Worth as compared to the immediately previous financial year.
In the reporting financial year there is no significant changes in key financial Ratios except as below which are basically due to increase in operation profit margin only:
|S. No.||Particulars||As on 31.03.2019||As on 31.03.2018|
|A||Interest Coverage ratio||0.95||0.76|
|B||Net Profit Margin (%)||0.12%||-0.56%|
|C||Return on Net worth (%)||0.16%||-0.70%|
Statement in the Management Discussion & Analysis, describing the Companys objectives, projections and estimates are forward looking statements and progressive within the meaning of applicable laws and regulations.
Actual results may vary from those expressed or implied, depending upon the economic conditions, Government policies and other incidental factors.