Maharashtra Polybutenes Ltd Management Discussions

INDUSTRIAL STRUCTURE AND DEVELOPMENT:

The main product of the company is Polyisobutene (PIB), an industrial chemical used in the manufacture of lubricant oil, jelly filled cables, impulsions as well as in formulation of engine oil for two strokes engines. Other application of PIB are in the manufacturing of adhesives, caulking and sealing compounds, leather finishing, engineering, plastics, insecticide etc.

There are four indigenous manufacturing units for this product in India. Overall companys product demand has good potential worldwide. Due to cost structure there are no possibilities of coming up with new capacity in companies product (PIB). However, the demand of our product is increasing due to newer application in chemical industry and specialty chemicals are being found like replacing some of the additives in lubricant industry with PIB.

OPPORTUNITIES AND THREATS:

The Company enjoys good reputation with the institutions and industries. The alternative financial arrangement is planned and implemented.

The Company expects better performance in the current year 2015-2016 with higher capacity utilization. The Company has been successfully in winning orders from Lubrizol India Pvt. Ltd. Bharat Petroleum Corporation Ltd, Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited and other big players in the Industry. Further, the company is exploring opportunities to increase the quantum of exports of its products in various countries to increase its capacity utilization.

SEGMENTATION OR PRODUCT WISE PERFORMANCE:

The company manufactures and sells single product Polyisobutene (PIB).

OUTLOOK, RISK, AND CONCERNS:

The international market and realization for PIB has been buoyant during the year. The demand in the country has been steady, the outlook for the realization and demand in the coming years is bright and your company is planning to take advantage of the opportunities in domestic as well as in international market. The Company could not achieve the production targets because of adverse market conditions, irregular supply of raw material etc. The Company has tied up with M/s Haldia Petrochemicals Ltd situated in West Bengal for the raw material but the transportation cost is much higher which is the main concern and an issue for the Company now the company has approached Indian Oil Corporation and is confident of getting raw material supply.

INTERNAL CONTROL SYSTEMS AND RISK MANAGEMENT:

The internal control system is well structured and ensures optimum use of resources and safeguards the assets. The Company follows pre-defined rules and procedure and the same commensurate with the size and the nature of the Company. The Company has an efficient system of internal audit, accounting and administrative controls to ensure safety of Companys assets and interests.

The Company has well structured organizational hierarchy with clear authority and responsibility. The information flow system is efficient and the reporting system is strong.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

During the year the company has carried its operation to the best of the available resources and manpower. The financial performance commensurate with the operations of the company.

DEVELOPMENT IN HUMAN RESOURCE / INDUSTRIAL RELATIONS:

The relations with the worker during the year were satisfactorily. The Directors place on record their appreciation for the sincere and efficient services rendered by the executive, staff and workmen of the Company and are confident that they will contribute to the companys prosperity and growth.