Anil Special Steel Industries Ltd Management Discussions

OVERALL REVIEW, INDUSTRY OUTLOOK & COMPANYS OUTLOOK

During the year under review, Companys gross turnover increased by 90.20% over the previous year. The net profit for the current year is Rs.491 Lacs as compared to net profit of Rs. 32 Lacs earned in previous year, which shows and impressive growth in gross turnover as well as in net profit of the Company. The Company has sold the Vacant Land bearing Khasra No.115, 42/48, 43, 44, 45, 45/48 admeasuring 47,044.61 Sq. Mtr. situated at Kanakpura, P.O. Meenawala, Jaipur and the non-operating profit on account of the above sale Rs. 2317 Lacs is included in the Net Profit of the Company.

We are in the opinion that the demand for companys products would remain good in the current year in view of good industrial demand in both domestic and export market. And the company has also expanded its operation by putting up a new TMT REBAR plant, which has commenced from February, 2013 in this financial year. So, a lot of new opportunities shall be availed by the company both in domestic and international market. Your company is focusing on increased productivity, better product mix and thrust on sales and better price realization.

OPPORTUNITIES, THREATS AND CHALLENGES

The turnover has shown an impressive growth and the trend is expected to continue. And the company has also in the process to shift / modernize its existing operations of Unit-I (Flat Rolled Products Division) at new location situated at Village Sepatpura, Patwar Halka Dhawli, Tehsil Shahpura, District Jaipur. It will reduce the operational cost and improve the liquidity of the Company. So, the company has great opportunity to further strengthen its presence both in existing and new market and achieve higher sales.

The increased competition in the global and overall recession in the global market as well as domestic market especially in automobile sector is the main challenge to the company.

Company is quite competent to handle the competition successfully and gearing up itself to meet the challenge through continuous improvement in quality, reduction in costs, better marketing arrangements for higher value added products and expand its existing operations in the new market.

INTERNAL CONTROL SYSTEM AND ADEQUACY

The company has adequate internal control system to ensure operational efficiency, protection and conservation of resources, accuracy and promptness in financial reporting and compliance of laws and regulations. Your company is committed to maintain internal control systems and procedures designed to provide reasonable assurance for orderly and efficient conduct of business and security of its assets.

HUMAN RESOURCES / INDUSTRIAL RELATIONS

Training and development, safety and security and good relationship with human resources is of paramount importance. A competent, committed and experienced HRD team has made the workforce more efficient through well-structured training programme. Industrial relations remain cordial during the year.

CAUTIONARY STATEMENT

Statement in this Report, particularly those which relate to Management Discussion and Analysis, describing the Companys objectives, protections, estimates and expectations may constitute "forward looking statement" within the meaning of applicable laws and regulations. Actual results might differ materially from those either.

A) CONSERVATION OF ENERGY

Energy conservation is an ongoing process in our organization. Continuous monitoring, planning, development and modifications for energy conservation are done at the plants. The various measures have contributed to maintain energy cost within the desired levels.

(i) Flat Rolled Products Division

Consumption figures are not strictly comparable as Company produces wide verities of strips and consumption norms change according to thickness / width of strips as well as grade of material produced.

(ii) TMT Rebar Division

Consumption figures are not strictly comparable as Company produces wide verities of TMT REBAR Grades and consumption norms change according to their size, length and hardness.

a) Research and Development (R & D)

The company has no specific Research & Development Department. However it has Quality Assurance Department to check the quality of different products manufactured.

The company has been continuously improving the quality of the existing products and also been able to reduce the cost of production.

Management is committed to strengthen Quality Assurance Department, further to improve its competitiveness in times to come.

b) Expenditure on R & D

The company from time to time incurs expenditure, exposes itself to better technology and keeps abreast of technological improvements.

c) Technology Absorption, Adoption and Innovation

Modifications of process and products are carried out from time to time to suit market requirements and to improve operational efficiency.

The Company has no technical collaboration arrangement for manufacturing of flat Rolled Products, Circular Saws and TMT Rebars.