ras propack lamipack ltd merged Management discussions

RAS PROPACK LAMIPACK LIMITED ANNUAL REPORT 2009-2010 MANAGEMENT DISCUSSION AND ANALYSIS INDUSTRY STRUCTURE, DEVELOPMENT & OPPORTUNITIES: The Company caters to the toothpaste (oral care/dentifrice) segment. This segment accounts for major tube consumption. Currently even though the Industry is facing tough times due to competition, it is the level of service, quality of tubes and discounts offered primarily which drive the market. It is expected that once the financial restructuring is complete the Company would be in a position to take advantage of the growing FMCG segment in India and abroad. In addition to toothpaste, cosmetic segment would become a major contributor for growth of the tube market. Increase of awareness and higher availability of disposable income would result in a higher demand for cosmetic products. Besides laminate tubes has found acceptance in the pharmaceutical segment for non prescription drugs. THREATS, RISKS & CONCERN: Intense competition amongst the toothpaste majors in domestic and international market has lead to price cuts having adverse impact on the entire supply chain. Laminate tubes being an important cost-component of the toothpaste industry have come under pressure for price reductions. Keeping in mind the aforesaid constraints the Company would work out number of strategies including: * Reduction in down-time by minimizing tool changes, * Reduction in raw material cost through efficient procurement by regularly negotiating with its key raw material suppliers for price reduction. 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 laminated tubes 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 reviewed by the 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 fast changing market scenario, demand and supply conditions, raw material prices, competition from un organized markets with cheaper products , changes in government regulations, tax regimes, economic developments within the country and other factors such as outcome of the BIFR implementation of scheme etc.