hanung toys and textiles ltd Management discussions

This Report Covers the operations and financial Performance of the company for the year ended 31st March, 2017 and forms part of the Directors Report.

OVERVIEW

Your Company is engaged in the manufacturing of Home Furnishings and Stuffed Toys. Since incorporation in 1990, your Company has continued to do well. Our production units consist of toys manufacturing , home furnishings production facilities including weaving and processing facilities at Roorkee. Currently, Company is operating only from its textile unit located at Roorkee.

INTERNATIONAL MARKETING

Our major overseas market were in Europe, USA, Latin America and Australia. Our products were sold in over 30 countries and were available with the leading, Tier One, top most retailer in the world. this includes some of the finest international brands, serviced and supplied by us. During last few years, due to paucity of working capital, your Company has not been able to serve the international market but to keep the facilities running on Job Work basis for other exporters and domestic buyers.

DOMESTIC MARKET

Our products have wide acceptability in the domestic market. Our domestic brands - Play-n-Pets and Splash were available with all major retailers. A well established distribution network spreads across various towns. Our products were sold through a number of outlets. In the Stuffed Toys /Plush Toys category, our Company was the market leader & has major share of the market.

In spite of having such leadership and market acceptance, due to tight cash flow we could not explore and utilize this opportunity.

OPPORTUNITIES THREATS & RISK MITIGANTS

There is good scope for growth for the textile industry as Indias share in the global trade textiles is weak compared to other countries. The free trade environment is a great opportunity for the Indian textile industry to increase its share in the global market. Chinese exports are slowing down on account of various factors inclusive of increase in domestic demand and rising. costs. This is a good opportunity of which our textile industry should make use. In order to exploit this huge capacity, we need to augment our working capital requirements whether internally or externally.

The business environment is very challenging, as customers are cutting down on inventory level & making pricing competitive. The challenges are considerable in managing costs and retaining market share. The company recognize these challenges and has initiated steps to reduce waste, increase productivity and create a sustainable marketing strategy.

OPERATING RESULTS/FINANCIAL HIGHLIGHTS

The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013 and generally accepted accounting principles (GAAP) in India. The management accepts the responsibility for the integrity and objectivity of these financial statements and the basis for the various estimates and judgments used in preparing the financial statements.

During the year, the Company has achieved Gross Revenue including other income of Rs. 1,411.53 lacs, Loss before tax was at Rs. (8,619.88) lacs and net Loss after tax also stood at Rs.(11,023.88) lacs.

Earnings per equity share (face value Rs.10/-) during the year under review in Rs. (35.77) against last year in Rs. (354.71).

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUANCY

The Company is committed to maintaining an effective system of internal control for facilitating accurate, reliable and speedy compilation of financial information, safeguarding the assets and interests of the Company and ensuring compliance with all laws and regulations. The Company has an internal control department to monitor, review and update internal controls on an ongoing basis. The Company has put in place a well defined organization structure, authority levels and internal guidelines for conducting business transactions.

The Company has an Internal Audit Department to monitor and review all transactions independently to get higher level of efficiency. It reports directly to the Audit Committee, on quarterly basis. The Audit Department conducts audit of all key business areas as per the pre-drawn audit plan. All significant audit observations and follow up actions are reported to the Audit Committee along Internal Audit reports and managements responses/replies. The minutes of Audit Committee are reviewed by the Board of Directors for its suggestions/recommendations to further improve the internal control systems.

The Audit Committee periodically reviews audit plans, observations and recommendations of the internal audit department as well as external auditors with reference to significant risk areas and adequacy of internal controls.

HUMAN RESOURCES/INDUSTRIAL RELATIONS

Human resource is one of the key elements to achieve the objectives and strategies of the Company. The Company, therefore, looks at its employees as "Capital Assets". It provides to its employees a fair and equitable work environment in which senior colleagues provide ample support to their junior colleagues with a view to develop their skills and capabilities. The Company continuously nurtures this environment to keep its employees highly motivated, result oriented and adaptable to changing business environment.

CAUTION STATEMENT

Investors are cautioned that this discussion contains statements that involve risks and uncertainties. Words like anticipate, believe, estimate, intend, will, expect and other similar expressions are intended to identify such forward looking statements. The Company assumes no responsibility to amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events. Besides, the Company cannot guarantee that these assumptions and expectations are accurate or will be realized and actual results, performance or achievements could thus differ materially from those projected in any such forward looking statements.

Date: August 10th, 2017	By order of the Board
Place : Noida	For Hanung Toys and Textiles Limited
	Ashok Kumar Bansal
	Chairman-cum-Managing Director
	DIN 00028488