transmetal ltd Management discussions

TRANSMETAL LIMITED ANNUAL REPORT 2007-2008 MANAGEMENT DISCUSSION AND ANALYSIS REVIEW OF OPERATIONS AND OUTLOOK: The Company, during the year under review, continued its thrust on volume based growth both in domestic and export markets; with the operating margins under pressure; following steep escalations in raw material prices- fuelled by a demandpush in the chlor-alkali industry, oil prices and other inflationary factors. In the year under review, the Companys initiative of having acquired additional operating capacities; reached culmination with the Company entering into along term Supply Agreement, with a multinational company, for its Indian manufacturing facility as an exclusive supplier. The Customer trial runs have been successfully completed, in terms of enhanced quality norms, Commercial supplies will progressively commence from the first quarter of 2009. We had a chance to share with you, in the previous years Directors Report on acquisition of manufacturing facility of Paritej Molecules Pvt. Ltd, as a going concern. Paritej facility, which was acquired from September 7, 2007, in Karakhadi, near the Companys existing factory could be only partially operationalised, with one of the plants going on stream only from April, 2008. During the first quarter of the current year, the Companys plant for manufacture of Chlorpyriphos (technical) will go on stream with both of its Methyl and Ethyl variants. The corresponding capacities of penultimates to help integrate the operations have been streamlined and would be further augmented in the current year. In the current year, with the enhanced capacities, your Company has sanguine aspirations to more fully realise its operating potential; in respect of the ongoing products. Sustainability of our operations and volume growth may be impaired by runaway inflation, impacting many of the economies, across the world. Your Companys integrated operations will contribute to mitigate the downside. FINANCE: As stated in last report, to substantially fund acquisition of the additional manufacturing facilities, NaTCP Expansion and Chlorpyriphos Project, the Company issued 600,000 equity shares aggregating to Rs.555.00 lacs to Promoters, Associates, Employees and Mitsu Limited, on preferential basis. The Company also issued 5% non-cumulative redeemable preference shares of Rs.500.00 lacs to Mitsu Limited, on a preferential basis. Your Company raised term loans aggregating to Rs.1100 lacs and availed of working capital facilities enhancement of Rs.450 lacs. The Company has continued to receive good response to its fixed deposit scheme. INSURANCE: The Company continues to carry adequate insurance cover for all its assets against foreseeable perils like fire, flood, earthquake etc. and covers consequential loss and liability risks as per applicable provisions of Public Liability Insurance Act. ORGANISATIONAL DEVELOPMENT: Your Company continues to provide a thrust on promoting development and capacity building of its human resources; for employees at all levels. Towards this objective, the Company collaborate with Resonate Consulting, a renowned Organization Development Consulting outfit. A Development Center approach is being deployed as a key intervention, to focus on base lining and developing specific leadership competencies through group coaching to senior employees; by use of Appreciative Inquiry approach. Competency development programme has been integrated with business goals. The coachees, it is envisaged, will emanate as more effective second-tier line leaders, to progressively shoulder greater operational responsibilities. Another training organization, facilitates Supervisory Staff Leadership and Motivational training to augment shop floor skills and deliverance, both for office and factory staff. All employees and spouses are eligible to attend Vipassana Meditation Courses and encouraged for its regular practice, per your Companys policy; in terms of which, regular benefits are being availed of. The Company staff also collaborate to serve Vipassana Organizations in and around Vadodara.