maniyar plast ltd share price Management discussions

MANIYAR PLAST LIMITED ANNUAL REPORT 2002-2003 DIRECTORS REPORT MANAGEMENT DISCUSSION AND ANALYSIS REVIEW OF OPERATION: The year in retrospect was a tough one for the Indian Industry in general. The moulded furniture industry was not an exception to it. Though there was increase in the sales in general the margins remained very low. Raw- Material prices have remained a key factor in the operations which during the calendar 2002 saw its all time peak and remained the same more or less during the part of this year. The fluctuating level of input prices and intense competition from small producers have contributed to further loss in the moulded furniture products. The sale of the moulded furniture products marginally increased due to the introduction of the new models and improvement in the old models. The company is looking for tie-up with other small manufacturers for their moulds to manufacture chairs in the Companys name and get favourable market for its existing range of products. The turnover of the Company for the period under preview was Rs. 1678.24 Lacs against the turnover of Rs.1552.31 Lacs in the preceding year registering an increase in the turnover by around 8% on annualised basis. The Profit before interest and depreciation continued to be negative at Rs.179.34 Lacs. As per the directions of the Hon. BIFR, the Company had submitted a revival proposal to IDBI, and in the joint meeting held on 12/09/2003 with IDBI & all the bankers, it had been decided to conduct a Techno Eco Viability study (TEV) of the Company, As soon as the (TEV) Study Report is approved by the Banks and IDBI, it will be submitted to Hon. BIFR for its approval and a revival plan will be chalked-out. The Company had gone in appeal with Hon-AAIFR, which came late and the advertisement by IDBI for change of mgt. was already published in the newspaper, hence the Company withdraw its appeal. PROSPECTS FOR THE CURRENT YEAR: Though the sale of the Moulded Furniture products increased in the past year, the impact of the increased sale could not be seen on the profitability. The Company is sure to weave profit in the current year if the interest burden is waived off as per the revival proposal submitted to IDBI. Moreover with the availability of funds the Company can utilise the capacity of its machines to the full extent. The Company is also planning to introduce new models further as per the market taste and consumer demand in the current year by doing tie-up with other small manufacturers in the same segment. Though some of the Court cases have been solved, many are still pending. The Company is taking all measures to recover the dues against the cheques bounced by the distributors and is selling the goods on cash payment basis only. The directors are targeting to get highest level of output from the woven sacks segment as well. With the introduction of the new labour law by the Government for 50 Kg. packing the Company is confident that the demand for its product woven sacks will definitely increase Margins are sure to increase as the demand will increase for the bags. The government has already allowed the Sugar industry to pack 20% Sugar In Plastic Woven Bags. It is also expected that the packing of Food Grains will also be allowed in the Plastic bags, thereby resulting in higher profit margins. Now that new models have been introduced and with increase in the demand for the bags the Directors certainly feel that the lost market share could be gained and there will be a huge increase in the sales of the Company in the current year.