GLOBAL AND INDIAN ECONOMIC OVERVIEW:
Global economic activity is experiencing a broad-based and sharper-than-expected
slowdown, with inflation higher than seen in several decades, which is in double digits.
To control the same, the interest rate of Bank of England has been raised from 1.00 % as
on 05th May 2022 to 5.25% as on 03rd August, 2023. The
cost-of-living crisis, tightening financial conditions in most regions, Russias invasion
of Ukraine weigh heavily on the outlook. Global growth is forecast to slow from 6.0
percent in 2021 to 3.2 percent in 2022 and 2.7 percent in 2023. This is the weakest growth
profile since 2001 except for the global financial crisis and the acute phase of the
COVID-19 pandemic. Global inflation is forecast to rise from 4.7 percent in 2021 to 8.8
percent in 2022 but to decline to 6.5 percent in 2023 and to 4.1 percent by 2024. Monetary
policy should stay the course to restore price stability, and fiscal policy should aim to
alleviate the cost-of-living pressures while maintaining a sufficiently tight stance
aligned with monetary policy. Structural reforms can further support the fight against
inflation by improving productivity and easing supply constraints, while multilateral
cooperation is necessary for fast tracking the green energy transition and preventing
fragmentation.
INDIAN STRUCTURE AND ITS DEVELOPMENT
Plastic manufacturing is an essential industry that affects almost every aspect of our
daily lives. As the demand for plastic products continues to grow, it is crucial to
understand the manufacturing process, the types of plastic materials available, and the
environmental impact of plastic production and disposal. The plastic industry in the
country is an integral part of the economy, currently approximately 50,000 industries are
operating in the plastics sector and that most of these industries are micro, small and
medium scale industries contribute Rs 3.5 lakh crore to the countrys economy and also
generate employment opportunities for more than 50,000 people. About Rs. 35 thousand
crores worth of plastic is exported from India.
Plastics Industry market size is expected to grow at a CAGR (Compound annual growth
rate) of 8 -10 % until 2025. Global plastic industry is expected to grow at a CAGR of 3.7
% till 2028.
OVERVIEW AND OUTLOOK OF COMPANYS BUSINESS
AVSL Industries Limited are manufacturing organization and situated at: 1. Plot No.
E-675, Ph. I to IV, Ghatal, Samtal, Bhiwadi, District Alwar, Rajasthan-301019 2. Plot no.
717, Halol-2 and Halol- Maswad Industrial Estate, Gujarat-389350 3. Plot no. 2006, Halol
GIDC Estate, District Panchmahal, Gujarat-389350 4. Plot No G-152 TO G-162, Karoli
Industrial Area, Tehsil Tijara, Bhiwadi, Alwar, Rajasthan-301019 Since beginning, we were
mainly manufacturing: 1. Power Cable and Telecom Industry and some material for irrigation
industry. Our product includes PVC Compound, HDPE/LDPE Compound, PVC Filler, HDPE/LDPE
Tape, PVC tape, Polyester Tape and similar product, Aluminium Mylar tape, Marking tapes
(used in cable wires as well as irrigation pipes) these products are mainly manufactured
at Bhiwadi and Karoli (Rajasthan units). PVC compound and PVC filler and some other
products are manufacture at Maswad and Halol (Gujarat units). There is tremendous scope
and demand of the power cables and house wirings due to increased focus by Government of
India due to electrification and increased demand in housing. The raw material demand from
the user industry is again expected to be huge, so we are continuously trying to improve
the capacity utilizations. The new segment of PVC/ WPC board and door frames which is a
retail product and used by direct consumers with shorter credit cycle and direct touch
with customers is challenging but with bright future prospect to convert the company from
commodity driven to mixture of consumer driven.
We have got very good response from the industry due to increase focus by government of
India to housing for all. There is a huge demand due to multiple uses by household as well
as corporate sectors and product can be sold anywhere in India. We are right now selling
through wholesalers at present spreading all over India. These products are expected to
generate improved revenues in the coming years because of increasing in production
capacity, due to stabilization of production and increase in installed capacity.
MARKET OVERVIEW
PVC/WPC Foam Sheet, Boards & Door Frames (Chaukhat)
PVC/WPC Foam Sheets, Boards & Door Frames (Chaukhat) offers high durability, low
moisture content, and low water absorption, as compared to conventional wood products.
These properties have made it viable for use in railings, windows, doors, exterior siding,
fencing, flooring, and interior molding, and raised its demand from automotive and
construction industries.
CHALLENGES FACED BY COMPANY:
WPC/PVC board industry is heavily impacted due to wide fluctuations in the prices of
polymers and related processing agents and other raw material in the international market.
The manufacturing industries have increased the prices of WPC/PVC boards by mere 20
percent whereas impact is more than market can visibly handle in one go. Polymer resin
prices are shooting up very frequently, making it very difficult for industry to pass on
the prices of finished goods on regular basis. A sharp increase in finished goods prices
would be challenging task and also to maintain the products share in the market.
Company also faces the following challenges:
Challenges related to Waste: Waste can be a major issue in plastic manufacturing as it
can lead to higher costs and wasted materials. Waste is part and parcel of the
manufacturing process but being efficiently re-used by us.
Challenges related to Cost: The cost of plastic manufacturing can be a major challenge
as it involves many factors including raw materials, tooling, waste, and labor. Finding
ways to reduce costs without sacrificing quality can be difficult. These are some of the
biggest challenges that manufacturers face when producing plastic products. By
understanding the challenges and taking steps to address them, manufacturers can ensure
that their plastic products are produced to a high standard.
RISKS AND CONCERNS:
FY 2023 saw multiple external and internal challenges continuing to shape the overall
risk profile of the company. Macroeconomic and geo-political risks had an impact
throughout the year. The Russia-Ukraine war and geo-political tensions, trade wars and
imposed sanctions were pervasive and had direct and cascading impacts on economies and
businesses. Shortages, rising inflation, supply-chain disruptions, energy crisis led to
further uncertainties in the economic growth environment, with the year ending with
banking industry upheavals in US and Europe. Our company has to face intense competition
from unorganized sector pertaining to plastic compounds. Further, the raw material prices
remain volatile. It is very difficult to estimate the near future raw material cost. Our
company has an elaborate risk Management procedure and adopted a systematic approach to
mitigate risk associated with accomplishments of objectives, operations, revenues and
regulations. The Board takes responsibility for the overall process of risk management
throughout the organization. The Company has developed framework to mitigate the same and
the Audit Committee of the Board reviews the same periodically. Technology obsolescence,
market conditions, growing competition including imports and unorganized sector are major
risks perceived by the Company that may have adverse effect on Companys business and its
margin in future. The Company continuously focuses on safety of environment and is
increasing its awareness amongst the stakeholders.
ENVIRONMENT HEALTH & SAFETY:
Company is making serious efforts for marketing of its products in global markets.
With Indias growing importance as a low cost manufacturing base with good health,
safety and environment practices, your company sees a great potential in many of its
products. Effective steps have been taken in this regards. PVC/WPC Foam Sheets, Boards
& Door Frames(Chaukhat) are environmentally friendly solution compared to wood and
possibly one of the many sustainable alternative to a lot of regular building materials.
PVC/WPC is used today with a lot more potential than any other similar products. Further,
the Company ensures the health, safety and wellbeing of its employees, contractors, assets
and customers property.
FUTURE OUTLOOK
The Company continued its focus on marketing activities and strengthening its agent
network by participating in many new markets. Your company has introspected with its
customer base and greatly recognizes the need for innovations and new product developments
to drive growth and better margins. The expansion of the Indian economy has boosted the
demand for real estate and commercial buildings in the country. While residential building
accounts for most of the real estate in India, commercial construction has increased to
meet the growing need for office space, which has led to increase in consumption of PVC
foam Board and door frame as well as increase in demand of electricity which ultimately
result in increase in demand of our Industrial raw material for power cable across the
world. Also efforts by Government of India to boost "Housing for ALL" such as
Pradhan Mantri Awas Yojana, Pradhan Mantri Gramin Awas Yojana, DDA Housing Scheme, etc.,
to promote the development of housing projects in the country is further catalyzing the
product demand.
The Company has taken various initiatives and proactive steps to increase the
production of the Company, which may leads to upsurge in profit.
SEGMENTWISE PERFORMANCE
The business activities of the Company comprise in various business segments i.e.
Industrial Intermediate goods, Consumer Goods and other.
1. INDUSTRIAL INTERMEDIATE GOODS comprise of Raw Material for HT-LT
Power Cable & Telecom Cables and irrigation products.
Raw Material for HT/LT Cables & HDPE/PVC Pipes, PVC Filler, PP Filler, PVC
Compound, PVC Tape, LDPE/HDPE Tape, Polyester Tape, Identification Tape, Aluminium Mylar
Tape, Hot Foil Sequential Marking Tapes, Numbering Tapes.
2. CONSUMER GOODS comprise of Manufacturing of PVC/WPC Foam Board, Doors
& Door Frames (Chokhat) used as replacement of Wood and wood products like Ply
Boards and wooden doors.
3. OTHER GOODS comprise of trading of raw material, Job work, Rental Income and
other income.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company always strives to strengthen Internal Control Systems and processes for
smooth and efficient conduct of business and complies with applicable relevant laws and
regulations. A comprehensive delegation of power exists for smooth decision making.
Elaborate guidelines for preparation of accounts are followed for uniform compliance.
Further, all the key functional areas are governed by respective operating manuals. In
order to ensure that all checks and balances are in place and all Internal Control Systems
are in work, experienced firm conducts regular and exhaustive internal audits if
accountants in close co-ordination with the companys concerned accredited officials. The
Internal Financial Control are reviewed periodically and in particular the Internal
Auditors ensure that the company as in all material aspects, laid down Internal Financial
Controls including operational controls and that such controls are adequate and operating
efficiently.
HUMAN RESOURCES
Industrial Relations with staff and workmen at Head Office and across all the plants,
continued to be cordial. Your Company has successfully aligned human capital with business
and organizational objectives. The emphasis has been on teamwork, skill development and
development of leadership and functional capabilities of the employees. As on 31st March,
2023, there were 333 employees recorded on the payroll of the Company.
FINANCIAL PERFORMANCE
The financial statements have been prepared in accordance with the requirement of the
Companies Act 2013, and applicable accounting standards issued by the Institute of
Chartered Accountants of India. The details are mentioned below:
Particulars |
2022-23 |
2021-22 |
| Revenue from operations |
10130.48 |
10021.76 |
| Other income |
112.87 |
131.50 |
Total Revenue |
10243.34 |
10153.26 |
Total expenses |
10166.63 |
9337.12 |
| Profit before tax |
56.39 |
802.55 |
Profit after tax |
51.12 |
588.99 |
FINANCIAL REVIEW (INR in Lakhs)
Revenue from Operations:
During the year 2022-23 the total revenue of our company has increase from Rs 10130.48
as against Rs 10021.76 in year 2021-22.
Total Expenses (INR in Lakhs)
Total expenses consists of Material consumed, Cost of trading goods, change in value of
stock of Finished Goods/Work-in-process, Employee Benefit Expenses, Finance cost,
Depreciation & Amortization expenses and other expenses. During the year 2022-23, the
total expenses were increased from Rs 10,166.63 from Rs 9337.12 as compared to year
2021-22.
Employee benefit expenses (INR in Lakhs)
Expenses incurred on directors remuneration, employee remuneration and employee welfare
expenses during the financial year 2022-23 was Rs 544.09 and in 2021-22 it was Rs 403.38
Finance Cost (INR in Lakhs)
Expenses incurred on finance and interest cost during the financial year 2022-23
increases to Rs 213.79 from Rs 146.97 in financial year 2021-22.
Depreciation & Amortization expense (INR in Lakhs)
During the year, 2022-23 depreciation and amortization expense of our company has
increased to Rs 183.09 as against Rs 125.62 in year 2021-22 showing an increased.
Profit after Tax (INR in Lakhs)
The PAT is decreases in Financial Year 2022-23 is Rs 51.12 as compared to Rs 588.99 in
Financial Year 2021-22.
CAUTIONARY STATEMENT
Statement in this report, particularly those which relate to Managements Discussion
and Analysis detailing the Companys objectives, projections, estimates, expectations or
predictions are "forward-looking statements" within the meaning of applicable
securities laws and regulations. Actual results could differ materially from those
expressed or implied. Important factors that could make a difference to the Companys
operations include global and Indian demand-supply conditions, feedstock availability and
prices, cyclical demand and pricing in the Companys principal markets, changes in
Government regulations, tax regimes, economic developments within India and the countries
within which the Company conducts business and other factors such as litigation and labour
negotiations.
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