ras extrusions ltd merged Management discussions

RAS EXTRUSIONS LIMITED ANNUAL REPORT 2009-2010 MANAGEMENT DISCUSSION AND ANALYSIS INDUSTRY STRUCTURE AND DEVELOPMENT: The main product of the Company is multi-layer-laminated web, used for manufacturing soft squeeze laminated tubes. The Company caters to the toothpaste (oral care/dentifrice) segment. Currently even though the Industry is growing, it is the level of service, quality of web, discounts offered primarily drive the market. It is expected that once the final restructuring is completed the Company would be in a position to take advantage of the growing FMCG segment in India and abroad, with added advantage of competitive price offering and support of co-promoters , the worlds largest tube manufacturer. In addition to toothpaste, cosmetic segment has become a major contributor for growth of the tube market in India. This will help in enhancing the order book position of the Company, at a better margin for its products with higher volume of web sales. THREATS, RISKS & CONCERN: As mentioned above though the industry has started growing, after recessionary pressures on economy as a whole, it is discounts and promotions, which primarily drive it. Intense competition amongst the toothpaste majors in domestic and international market has lead to price cuts having adverse impact on the entire supply chain, as laminated tubes being an important cost-component of the toothpaste industry have come under pressure for price reductions, for the laminated web sourcing. Keeping in mind the aforesaid constraints the Company has worked out number of strategies including: * Reduction in raw material cost through efficient procurement by regularly negotiating with its key raw material suppliers for price revision and economic bulk order quantity sourcing once the restructuring is in place. OUTLOOK: The Company focuses on increase in volume, improve its efficiency by vigorously implementing cost reduction parameters viz. efficient procurement policy, applying various cost reduction methods, innovations, strengthening its quality parameters. The above steps would ultimately lead to production of quality laminate at competitive prices. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: The Company has proper and adequate control systems to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and that transaction are authorized, recorded and reported correctly. These are viewed by Audit Committee and the suggestion made by them are implemented. FINANCIAL PERFORMANCE: This has been covered in the Directors report. DEVELOPMENTS ON HUMAN RESOURCE / INDUSTRIAL RELATIONS FRONT: The Company continuously monitors its manpower requirement to ensure that it has adequate human skills commensurate with its needs. Industrial relations of the Company continue to be cordial. CAUTIONARY STATEMENT: Statements in the Managements Discussion and Analysis Report describing the Companys projections, estimates, expectations or predictions 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 would make a difference to the companys operations include demand supply conditions, raw material prices, changes in government regulations, tax regimes, economic developments within and outside the country, implementation of BIFR scheme etc.