India Foils Ltd merged Share Price Management Discussions
INDIA FOILS LIMITED
ANNUAL REPORT 2008-2009
MANAGEMENT DISCUSSION AND ANALYSIS
The core business of the Company is manufacturing and marketing of
aluminium foils. The management discussion and analysis is given hereunder:
INDUSTRY STRUCTURE & DEVELOPMENT:
Aluminium Industries in India is one of the leading industries in the
Indian economy. The growth of the aluminum Metal industry in India would be
sustained by the diversification and exploration of new horizons for the
industry. India has huge deposits of natural resources in form of minerals
like copper, chromite, iron ore, manganese, bauxite, gold, etc. The India
aluminum industry falls under the category of non iron based which include
the production of copper, tin, brass, lead, zinc, aluminum, and manganese.
The main operations of the Indian aluminum industry is mining of ores,
refining of the ore, casting, alloying, sheet, and rolling into foils. For
the sustenance of the growth the aluminum industry in India has to develop
research and development units to assist the production and improve on the
quality measures to keep a stringent quality control.
The Indian aluminum Metal Industries sector in the previous decade
experienced substantial success among the other industries. The Indian
aluminum industry is developing fast and the advancement in its
technologies is boosting the growth even faster. The utilization of both
international and domestic resources was significant in the rapid
development of the Indian aluminum industry. This rapid development has
made the Indian aluminum industry prominent among the investors. The Indian
aluminum industry has a bright future as it can become one of the largest
players in the global aluminum market as in India the consumption is fairly
low, the industry may use the surplus production to cater the international
need for aluminum which is used all over the world for its several
applications.
OPPORTUNITIES AND STRENGTHS:
Your company has realigned itself on the requirements of the market
especially in the value added sector . The company is now focusing on the
direct pharmaceuticals market instead of taking the distributor route .This
has not only enhanced average realisation of the products but also
contributed to cash flow. Positioning itself as a cost plus manufacturer
IFL has been able to steer clear of the vagaries of the erratic nature of
the LME. In the international arena the ties with Bangladesh pharma majors
has been reestablished and value added exports to the middle east and west
Africa have also revived the inherent strength of your company in the
pharmaceutical segment has been utilised by using 100% dc foilstock which
has given it a substantial advantage over competition .
RISKS & CONCERNS:
Like other non ferrous companies your company has also faced the problems
associated with the downturn in the marketplace. With the rising crude
costs all petroleum based products associated with the manufacturing
process have been north bound. This has had an effect on the cost incurred
in the processes. While your company has continuously been in touch with
the customers regarding realisation of the increased cost base but with the
given market scenario this is taking its own time. Also a long term pricing
mechanism is not feasible in the given scenario.
However your company has taken measures in energy efficiency and put energy
audits as well teams to work on recovery improvement which will be the main
drivers to reduce cost.
OUTLOOK:
Your Company has shown resilience time and again by fighting against all
odds and marching ahead at every step. The accelerated growth of the
Pharmaceutical sector would create additional demands and your Company is
geared up to convert new opportunities into successful businesses going
forward. External factors would continue to play an important role but
through effective risk management processes, it would be possible to steer
ahead in turbulent times, based on your Companys high level of engagement
and commitment both internally as well as externally.
Your Company has joined hands with Ess Dee Aluminium Limited for its
revival and accordingly submitted a modified draft rehabilitation scheme to
BIFR.
INTERNAL CONTROL & SYSTEMS AND THEIR ADEQUACY:
Your Company has appropriate internal control systems and procedures in
place with regard to effective utilization of resources, efficiency in
operation, financial reporting and compliance with various rules and
regulations. The internal control system is designed to ensure that the
financial and other records are reliable for preparing financial statements
and other data and for maintaining accountability of assets and further
supplemented by extensive audits conducted by the Auditors. Regular audits
are conducted to review the adequacy and effectiveness of the internal
controls and suggest improvement, if any, for strengthening the existing
system.
ENVIRONMENT & SAFETY:
Safety and Environment Management continues to be one of the key result
areas for your company. The Company is committed to providing a safe and
healthy workplace for all of its employees including contract workmen.
Appropriate training is provided to all of its employees and associates to
minimize the risk. The company has adopted a Framework of Standards aligned
to ISO 9001 standards. IFL is committed to the environmental improvement of
its products. The Company will continue to devote significant resources to
control air and water pollutants, to dispose of wastes and to provide risk
free environment around the work place and in the neighbourhood. Concern
for environment and safety are integral to IFLs business and part of
business ethos.
INDUSTRIAL RELATIONS & HUMAN RESOURCE MANAGEMENT:
The Company constantly endeavors to attract and recruit the best talent and
to retain, nurture and groom to meet its current and future challenges. It
places utmost importance to the quality of its human resources. As on March
31, 2009 the Company had 442 employees. It places great emphasis on the
training and development of employees at all levels and seeks to achieve
closer alignment between their objectives and the strategic objective of
business through intensive communication of the corporate strategic
objectives to all employees. The Industrial Relations continue to be
peaceful and cordial. The Directors wish to acknowledge the efforts of all
the employees.
CAUTIONARY STATEMENT:
Statements in the Management Discussion and Analysis describing the
Companys objectives, projections, estimates, expectations may be 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 economic conditions affecting demand/supply and price
conditions in the domestic and overseas markets in which the Company
operates, changes in the Government regulations, tax laws, labour policies
and other statutes and other incidental factors.