Today's Top Gainer
Note:Top Gainer - Nifty 50 More
Metals industries are an indispensable part of an economy, they from the backbone of industrial development of any country. Metal is a key sector as if meets the requirements of a wide range of important industries. Being a core sector it tracks the overall economic growth in the long term. The metal industry has two main segments ferrous & Non-Ferrous. The global non-ferrous metals industry has been witnessing a dramatic shift in the past few years.
MAJOR KEY FOR GROWTH IN METAL INDUSTRY
Development in Organizational Capability
Grip on Market Trend
Higher Service Level
Proactive and Positive Policy Environment
FY 2015 was another challenging year for the Metal markets, as the total value of metals sector deals in 2014 fell close to the lowest levels recorded in any reports. Deal value dropped a dramatic 52% year on year, from US$34.8bn in 2013 to US$16.8bn in 2014, US$1.7bn above the low of 2009, and immediately post-credit crunch. Its a far cry from the 2006-08 periods when total deal value in the sector was an average of more than five times higher.
In the international markets, the overall sector of metals traded on the London Metal Exchange (LME) was down 5.5% in 2014.
Base metal prices, as a sector rallied during the first half of the year but the rally sputtered due to a rising dollar and global economic conditions.
There were some bright spots in non-ferrous metals for the bulls in 2014. Copper is generally a leader in this sector but the copper price was weak throughout the year. In 2014, aluminum, nickel and zinc prices moved to the upside. All other metals moved lower led by copper.
Metals Trading Analysis
Copper was in poor health for most of the year. Chinas crackdown on financing transactions using metal as collateral was also said to be a reason for coppers fall from grace. The metal had fallen by around 14% since the start of the year.
In relation to copper, aluminium and zinc prices did better with their prices rising by around 5% and 4%, respectively, in the year. Aluminium metal premiums had been rising steadily during the year as buyers were forced to pay extra for quicker deliveries. Higher prices helped the margins of Indian Market.
Zinc was expected to see higher demand in 2014 due to demand for galvanizing operations. That did happen and zinc use rose 5.9% on the back of higher global demand, while refined metal production rose by only 3.8%, causing a deficit situation. In aluminium, reacting to weakening demand conditions, companies had to shutdown unviable capacities. A tighter supply market has supported prices and metal premiums. In 2015, metal prices may see some volatility depending on whether supply declines in response to falling prices. While zinc and aluminium had a good year in 2014, there is gurantee for if that will continue next year, too. If Chinas economic growth continues to slip and its appetite for non-ferrous metals declined, then major impact on prices could be expected.
OPPORTUNITIES & STRENGHTS
Being a trading company, opportunities and threats to the company are those which are applicable to all the companies operating in the Metal Industry keeping in view of the present market sentiments and government policies.
Aseem Global Limited is a thriving company in the sourcing and distribution of Non-Ferrous and Ferrous metals. The company provides high quality service and support to a wide variety of business organizations throughout India and abroad - whatever their particular interest in metals and wherever they are located.
Majority of the local demand in India is met from Imports .The Company has been in the trade since long and has a very good sourcing network from the various corners of the globe. The Company has been able to negotiate best deals with the suppliers.
As the company is working towards its long-term goal of becoming a fully integrated metals organization, Aseem Global
Limited is able to add value to its customers. We are able to provide them with flexible settlement terms, advantageous supply arrangements, advisory services and other standard services.
OUR GLOBAL STRATEGY
Since its foundation, the goal of Aseem Global Ltd. has been to establish close, long term relationships with its customers which are and mutually beneficial.
Over the years the company has developed good relationships across the globe and has business associates in Europe, USA, Asia pacific, and Middle East.
Irrespective of which particular industry sector its customers operates in, Aseem Global is able to provide best solutions to individual needs - and high levels of personal service. For customers looking for more than just metals from their supplier, a strategic alliance with Aseem Global provides them with all the supplementary services their business needs.
This has brought related benefits, By dealing with an organization that is closely matched to its own, they can be sure of high levels of personal service from key contacts in each of the Groups regional offices and considerably less bureaucracy than is found in more formal organizations.
RISK AND CONCERNS
The Aseem Group aims to address risks, opportunities and threats posed by its business environment strategically by maintaining sustainable and robust business models and further improving on them. . The sector is also faced with the increased challenges of changing expectations in the maintenance of its social license to operate. We have identified associated risks on several fronts and have formulated policies to categorically deal with each of them .Aseem global response to these elements is discussed in the sections below.
Raw Material Risk
As zinc, accounts for the huge cost out of total operating cost in the industry, any adverse impact on zinc production or extreme price could put pressure on the Companys margin. The non-availability of raw materials at appropriate price, quantity and quality for our energy requirements may also affect the industry. The Companys growing contact farming network assures that it receives continued and adequate access to good quality.
Foreign Exchange Risk
The Company is expected to face strong competitive pressures both domestic and overseas .The Company is also exposed to financial risk from changes in interest rates, Foreign exchange rates and commodity prices.The Company also faces challenges with regard to the currency markets comes from the US Dollar determined pricing of zinc, lead and silver. Being a trading and manufacturing Company, a large portion of the Companys purchase comes from the import. The fluctuations in the Indian Rupee, especially a weakling against major currencies, could adversely impact Aseems Margins. The Company has a foreign exchange risk management policy which allows it to hedge all foreign exchange exposures.
Intensity of Competition has increased in almost all the segments of Indian Metal market-due to entry of new players and expansion plans of Existing Competitors. The Company is aware of the increasing Competition and add to the risk factor and is taking measures to remain competitive in the market place.
Safety & Environmental Risk
We faces many hazardous problems while our production activities. Any accident or other unfortunate happens may cause personal injury or death and damage to property and environment. To fight with these risks, we are regularly monitoring and reviewing the workers activities and way of working to give high priority to safety, health and environment. Simultaneously we organize training sections for the workers on regular basis.
The Group operates in multiple geographies and thus has compliance obligations with diverse and complex laws regulations and contractual commitments relating to health safety, environment and regulatory compliance. The risk of substantial costs, liabilities and damage to reputation related to non-compliance with these laws and regulations are an inherent part of the Groups business. The Group has policies, systems and procedures in place aimed at continuously improving safety performance and minimizing the impact of the Groups operations on the environment.
The Global market products are affected by the LME prices i.e. London Metal Exchange. The fluctuation in prices on LME affects all the metal market. Any adverse fluctuation in prices could impact on our revenue adversely vis-a-vis our business. Therefore, we are regularly trying to match with the average LME prices for a month or for a year. Any fluctuation in the prices of the metals that we produce and sell will have a direct impact upon our business profitability. According to the board policies, we follow the defined internal controls, monitor the production & trading mechanism and sell our products at prevailing market prices.
The Company has initiated several measures to manage operational risk through identification, assessment and monitoring of inherent risks in all its business process. The increased cost of transport services, non-availability of transports, strikes, equipment failures, delay in supply of raw material, machinery breakdowns, industrial disputes, power fuel & electricity problems and other interruptions are the major operational risks. We are highly focused on operational risks. While many of these risks are beyond our control, still we regularly try to cope-up with these risks by using our adequate and consistent policies. We move by taking proper time margin to fight back with the problems such as delay in supply, machinery breakdown, strikes etc.
Political & Regulatory Risk
The government policies related to rates, government assistance for exports, tax structure, license permits etc. reflects the overall market conditions. Any downfall in countrys economy and political instability also give impact the business movements. We try to pre-identify these types of initiatives and policies of government through our R & D analysis and manage risk. By implementing the rules & regulations of government on our business activities properly, we make a route to move business efficiently.
Apart from the risks mentioned above, the Companys business is expected to other risks such as mismatch in demand and supply, Cost Risk, Financial Risk, Realization Risk, Market Risk, Lack in efficiency of Man-power, Insurance Risk, which are mitigated through regular monitoring and corrective action.
Chinas uncertain economic situation is likely to hang heavy over the non-ferrous metals sector in 2015. The country is one of the largest consumers and producers of non-ferrous metals and its decision to re-balance economic growth from an investment-focused one to a consumption-oriented one can upset demand-supply balances. As a result of these reforms, other emerging markets too, could see slower growth. while Europes growth shall also continues to bring in volatility in the metal markets.
On the domestic front, the formation of new stable government at the Centre has reaffirmed the corporate and consumer sentiment significantly. Moreover, adoption of various structural and pro-business reforms is likely to put the economic growth back on track in a phased manner. Expected improvement in domestic GDP growth would improve both domestic demand for the various base metals such as iron & steel, aluminum and copper.
Additionally, expected reduction in interest rate would likely boost the credit-off take and improve overall investment and add to the demand of end-user segments in India. Thus, we expect domestic demand for metals to improve in 2015 following a recovery in the end-user industries such as industrial construction, civic infrastructure, power, automobiles, industrial machinery, and consumer goods, among others.
The Company moves forward to enhance its capacity to meet the demand of its customers and finalized plan for capacity expansion at its manufacturing unit to meet future demand of the industry.
The Company managed to sustain its production in comparison to previous year, given the high competition in the market. It also faced lack of liquidity due to volatile of the dollar in Indian market. However, given the tough working conditions, company managed to increase its customer base by 23% and also managed to produce two other brands of high grade zinc ingots.
Energy Efficiency & Conservation
The Conservation of energy plays a crucial role in performance of business. To lower the operating cost, the motor efficiency should be higher, we maintain and keep motors running efficiently and identify the problems before a breakdown. Through our simple actions, such as building advance energy considerations into the design and development of new assets and operations, using waste and process outputs as fuel sources, using more renewable energy sources to support operational power needs and Improving the energy efficiency of current operations, we will in a better position to control use, avoid high rates and negotiate with utilities. We have developed a fuel management strategy to profit from price volatility in fuels, energy efficiency both directly and indirectly add to manufactures bottom line- directly by cutting a Companys utility bills. Energy savings means to save water, so the companies use water harvesting system & water scrubber which leads to cost reduction and environment friendly.
For the maximization of energy savings and its overall benefits to the company, we have implemented a comprehensive energy and environmental- Management program.
For the improvement of overall comprehensive energy and to set targets to achieve our efficiency goals we have designated an energy manager.
Afforestation Activities & Pollution Control
As the world is in forefront of facing global problems such as "Global Warming" & "Energy issues"
Aseem Global Limited has accorded the high priority to ecology development and pollution control. Aseem believes that a clean environment in and around the workplace fosters health and prosperity for the individual, the group and the larger community to which they belong. Environmental protection is an integral part of the planning, design, construction, operation and maintenance of all our projects.
Aseem Global Limited is trying various activities such as plantation and cultivation in the factory premises and in the nearest areas of the factory. We understand that in a production factory the polluted air or gases come out from the chimneys or otherwise. Therefore, continuous monitoring in respect of liquid/ gaseous effluents control is carried out at units and treated effluents meet all the statutory requirements. A pollution level in air is being continuously monitored through continuous checking. In the premises, we have set- up a nursery for the fresh air & to reduce the bad impact on the environment through gases. Simultaneously, the above mentioned activities affect the pollution also. The Company follow the pollution control policies as charted by the Management. The factory has proper pollution control plant and we have obtained pollution control certificate from the Authority on its effective techniques and efforts to control the pollution. All the guidelines of the Central Pollution Control Board have been adhered too.
Abu Road is located in Distt. Sirohi (Rajasthan), which is a backward district and enjoys host of privileges including subsidy @50% of development charge on land cost,50% on electricity for tribal area, 1% on sales Tax and other tax incentives from the state government. Many Schemes have been formulated to develop marketing infrastructure in this area.
Aseem Global Limited has also fulfilled all criteria & norms and is following all rules & regulations prescribed by the government to get the subsidy and the Company has successfully achieved the same.
The main objectives of these schemes are to promote the direct marketing, to strengthen the existing business environment, to provide better infrastructure facilities for standardization, to stand with the competitive scenario etc.
The Company gives high priority towards training of executives, supervisors and workers. Apart from utilizing the training facilities available in-house, the employees are encouraged to go to other training centers within India. Training facilities provided by the equipment manufacturers within the country/abroad are also utilized.
In house and on the job training fulfills the Training needs of all Categories of Employees and benefits by developing the Skills, Knowledge and Attitude. In-house Training Programmers are planned systematically.
AGL continues to maintain cordial industrial relations. The Management has a regular system of discussions on common matters which help to maintain good industrial relations and to create mutual trust and belief among the employees. Company is also a member of Bombay Metal Exchange, where all the government policies or grievances are addressed.
Health & Safety Measures
The Company continually assesses its norms on the health & safety measures and collects the feedback from all the employees. The Company involves in the activities of prevention, information and training workers particularly to:-
1. Avoid risk or manage those risks that cannot be avoid;
2. Give appropriate instructions to workers by promoting common protective measures;
3. Adapt working conditions & equipment carefully.
In the factory, there are a spaniel section of staff to take care of hygiene related issues such as the canteen, bathrooms etc. We provide the masks, helmets, shoes, hand gloves and spects to all workers during their production activities to protect them from any unwanted disease which can be come out from the gases and other type of elements. We provide first aid facilities to our employees and workers. Aseems occupational health centers carry out pre-employment and periodic medical checkups as well as other routine preventive services. Specialized tests like biological monitoring, health risk assessment studies and audits for exposure to various materials are also performed. Health education and awareness form an integral part of the health care programme at Aseem.
In the Companys factory, there is proper fire fighting equipment to fight with any mis-happening. All the workers are properly insured and the Company follows the rules & regulations of the ESI.
The manufacturing unit is very closed to the well flourishing markets of Gujarat & Maharashtra. Abu Road is located almost on the border with Gujarat. Abu Road is well connected with other parts of the country by both rail and road. All superfast trains including Rajdhani stop at Abu Road. The city is also located on a 4 lane Notional Highway no: 27 and is part of the proposed Delhi Mumbai Industrial Corridor (DMIC).
In compassion with other parts of Rajasthan, the area receives reasonable rainfall and is on the foothill of the famous tourist and religious destinations of Mount Abu (Hill Resort).
The manufacturing unit is ideally located very closed to sea parts of the country. The raw material comprising of aluminum, zinc, brass, & copper scrap can be conveniently and early sourced from overseas destinations.
Manpower Welfare & Women Empowerment Measures
The welfare measures involve three major aspects which are occupational health care, suitable working time and appropriate salary. There are approx 200 workers in our factory. The factory has a canteen for workers, in which four times meals are provided to the workers and their families. The Company provides the quarter to all workers and their families. The Company also provides uniform to all the workers.
Workers or employees have two components in their life: social life and work life. Invariably, there is a reciprocal influence between these two components. The management has left out of such measures in certain areas where there is an imbalance of the two components and consequence stress and strain for the stakeholders. The Company prefer to the physical, mental, moral & emotional wellbeing of its workers. The welfare measures aim at integrating the socio- psychological need of employees.
The Company follows rules & regulations of all governments established acts, laws & legal process such as The Factories Act, Employees Provident Fund Act, Employees State Insurance Act, Industrial Dispute Act etc. Most importantly, there are approx 50 women workers in the factory premises. The Company takes care of the women workers especially and gives equal environment to them. We are strictly against the child labour. The Company provides the preventive services and counseling to women employees time to time. There is the facility of regular health checkup of women in factory. Women employees are also actively participating in various culture and extra- curricular activities organized by Aseem from time to time. Aseem Global Ltd. has also instituted the annual Woman Exemplar Award to honour women who have taken development initiatives against all odds in the fields of education and literacy, health and micro enterprises.
Our management takes care of the women from any type of harassment at work place. Training is imported to woman employees in the field of technical as well as administrative matters. The Company has adopted the principal of equal opportunity to the women employees or workers in the matter of employment.
As the business environment gets increasingly complex and stakeholders become vocal about their expectations, good social initiatives practices can only bring in greater benefits, some of which are as follows:
Our initiatives in terms of employment and skills development; they cover matters such as job tenure, benefit systems, and worker protections; they also cover educational, charitable, and artistic provision; they may include the participation and representation of employees and other groups in the governance of the enterprise.
Internal activities for social initiatives related to employment, training and welfare measures undertaken by organizations for their own employees. AGL provides policies related to higher levels of training and provide greater job security.
AGL covers external initiatives which are undertaken by company for those outside the Organization. This can be for individuals, for groups, or for their organizations. This can be for individuals and groups might cover family members of employees or past employees such as pensioners .Outside Organization here might include business partners and sub contractors, suppliers and customers; they might also extend to local and national community groups and voluntary organizations such as charities.
INTERNAL CONTROL SYSTEMS
The Company has adequate internal control procedures commensurate with its size and nature of business. Their objective is to ensure efficient usage and protection of the Companys resources, accuracy in financial reporting and due compliance of statutes and procedures.
The Company has well documented policies, procedures and authorization guidelines commensurate with the level of responsibility and standard operating procedures specific to the respective business. The Company has a full-Fledged in house internal audit and post-Audit checks and reviews are carried out to ensure follow up on the observations made by the Audit teams. The Audit Committee of the Board, in its periodic meetings, reviews the Internal Audit Reports, the progress in implementation of their recommendations and the adequacy of Internal Control Systems.
At the core of Aseem Global Human Resource Management (HRM) policy is the underlying belief that employees are our primary source of competitiveness. Hence the focus is on enriching the quality of life of its employees, developing their potential and maximizing their productivity. With the unique attributes of our policy are climate of openness, equity, fairness and respect for the individual, freedom to experiment, mutual trust, and teamwork and strives to attract the best available talent and ensure diversity in its workforce.
FORWARD LOOKING STATEMENTS
The Management Discussions and Analysiss statements that address expectations or projections about the future, including but not limited to statements about the Companys strategy for growth, product development, market position, expenditures, and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized.
The Companys actual results, performance or achievements could thus differ materially from those projected in any such forward looking statements. Important factors that could make a difference to the Companys operations include economic conditions affecting demand and supply and price conditions in domestic and international market, changes in Government regulations, tax regimes, economic developments and other related and incidental factors.