THE MANAGEMENT DISCUSSION AND ANALYSIS REPORT The Indian economy witnessed sluggish growth in the first quarter of financial year 2014-15. On the domestic front, policy paralysis of the last couple of years continued right up to the national elections and added to that was virtual stoppage of all infrastructure projects both in the private and public sectors as well as through public-private partnerships. Also there were continuing inflationary brssures and interest rates remained far too high for financing long term projects. On the external front, there were uncertainties regarding growth of Euro Zone, conflicts in the Middle East and concerns about the falling growth in China. After the new government at the Centre, there is an environment of optimism and positive talk of growth, of infrastructure development, allocation of telecom spectrum, unblocking of coal mines, deregulation of diesel prices and ambitious 'Make-In-India' campaign. Crude oil prices started moving south which, in turn, reduced the oil import bill resulting in both fiscal comfort and lesser brssure on the current account. As a result of improving macro-economic situation, the wholesale and consumer price inflation started dropping. The low economic growth appears to have bottomed-out and a gradual increase in economic activity has started. The medium term to long term growth prospects look positive in view of government's determination to bring in reforms. During the current financial year, the economy is expected to grow at a higher rate than in the brvious year. The long term prospects for the economy appear optimistic. OPPORTUNTIES & THREATS Our Company is one of the leading and established Company in Metal packaging industry. We are keenly conscious of the emerging opportunities in the can-manufacturing sector in India as well as abroad and we shall endeavor to take benefit of every good opportunity in the very best interest of our members. Following are the opportunity and threats of our Company: OPPORTUNITIES 1. Historical established performance. 2. Established customer profile and wide customer base. 3. Reputation for quality, well established brand. 4. Edge in raw material procurement. 5. Ability to expand and diversify. 6. Expansion in export market. 7. Professionally & technically qualified Human Resource. 8. Priority of the Government to promote Food Processing Industry. 9. Innovation and new product development. THREATS 1. Global competition. 2. Lower recovery in Global Economy. 3. Volatility in exchange rate. 4. Competition from unorganized sector. 5. Thin margin. 6. Alternate packaging materials 7. Uncertainty in availability of seasonal fruits & vegetables 8. Political turmoil and unrest in Middle East 9. Eurozone sovereign debt crisis 10. Inflation & Finance Cost PRODUCT WISE PERFORMANCE The Company had been mainly focusing on food products and now gradually expanding its base in non food sector also. In addition Company is also developing new innovative products for domestic and global market. OUTLOOK The outlook of the Company seems to be progressive. The management of the Company is engaged in the task of reducing overheads and other costs. Company has a vision to consolidate its position as leader in metal packaging segment. RISK There is a trend towards alternate packaging which is cheaper as compared to metal packaging with shorter shelf life inspite of the fact that metal packaging has an edge over them in terms of shelf life, sustainability etc. CONCERN The main concern is the inflation in the Indian economy resulting into increase in cost of various inputs particularly Tinplate, rising interest rates and lower recovery in global economy. Further there is a concern on Mandatory certification of BIS on tinplate (our major raw material) as announced by ministry of steel as per their draft notification dated 29/04/2015 which, if not withdrawn, may result in increase of tinplate prices in India and also hamper the imports of tinplate. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY The Company has adequate internal control systems commensurate with its size and complexity of operations. The Internal Control systems are aimed at monitoring efficiency of operation, ensuring protection of resources, accuracy and promptness of financial reporting and compliance with statutes and regulations. All the vital internal control systems in the Company are working satisfactorily. Our statutory and Internal Auditors have not reported any serious departure in any of the internal control systems. The Audit Committee of the Company regularly reviews internal control systems of the Company and continuous improvements are being made in the same. Budgets are brpared every year and the actual performance is compared to the budgeted performance. The variances are reviewed on a monthly basis and corrective actions are taken accordingly. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE. Despite of inflationary environment and increasingly fierce competition, extremely challenging domestic business environment, political turmoil and unrest in Middle east and Eurozone sovereign debt crisis, your Company delivers and achieves Rs.31955.32 lacs as against the brvious year's turnover of Rs. 31362.85 lacs i.e. an increase of 592.47 lacs (1.89%). The Export Sales has also been increased from Rs. 6907.73 lacs to Rs. 6996.85 lacs i.e. an increase of Rs. 89.12 lacs (1.29%). The Company has been successful in increasing its PAT from Rs. 840.85 lacs in brvious year to Rs. 855.99 lacs in current year i.e. an increase of Rs. 15.14 lacs (1.80 %). CORPORATE SOCIAL RESPONSIBILITY The Company recognizes the fact that, beyond the day-to-day conduct of its business, as a responsible corporate citizen, it has to discharge its duties towards the larger society in which it operates. The core areas identified by your Company and CSR Committee in order to improve the society are promoting Education, Health Care, Women Empowerment and ensuring Environmental sustainability. MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL FUND The Company's ability to deliver value products to clients depends largely on its ability to attract, train, motivate, empower and retain the best professionals. Annual performance appraisal system is already in place to evaluate the operational performance of each employee on the basis of brdefined Key Result Area. The Company has 446 permanent employees as on 31st March, 2015. Industrial relation front continued to be peaceful with no working day loss due to any activity. VALUE CREATION Hindustan Tin Works Ltd has showcased dynamism in promoting sustainability of cans at a global level. In 2010, HTW launched a campaign to promote the sustainability messaging of cans, a campaign called Canvironment Week has won several international accolades and awards for its design and uniqueness of going directly to the final consumer. The campaign which received the Innovation award by Messe Essen at the last MetPack, IPA Innovation Award, Empac Challenge Award is in its 5 year and has worked with the government, community and the youth. Rag pickers are the major cog in the recycling wheel of India, they are the scavengers of the society who pick up the cans from the streets, households and further send it for recycling. These rag pickers live in under privileged conditions and under the banner of Canvironment Week we work to uplift their lives, improve their health and safety environment, give them vocational training and a better life as a humble contribution to the society. CAUTIONARY STATEMENT The statements in the ""Management Discussion and Analysis Report"" section describes the Company's objectives, projections, estimates, expectations and brdictions, which may be ""forward looking statements" within the meaning of the applicable laws and regulations. The annual results can differ materially from those exbrssed or implied, depending upon the economic and climatic conditions, Government policies and other incidental factors. |