Today's Top Gainer
Note:Top Gainer - Nifty 50 More
Pursuant to the amended Clause 49 [VIII] [D] of the Listing Agreement, your Directors wish to report as follows:
a] Industry Structure & Developments :
The Company is engaged in the business of manufacturing glass containers. Products are mainly being supplied to the Spirits, Soft Drink and Food Industries. The growth factors in Spirits is highest and growing each year with double digit growth. With several Multi National Companies arranging tie up with Indian Manufacturing units, the Companys future growth prospects appear to be bright. Ban enforced by the Central Government for use of PET bottles in Pharmaceutical Industry gave much needed boost to the Glass industry.
b] Opportunities & Threats
Though advanced economies have taken a positive turn on growth front with US having achieved 2.4% and with overall growth of 1.8% on an average, China has of late, been a cause of concern having recorded slowest growth rate during last 24 years. As a result overall growth rate of Emerging market has slid to 4.6% against 5% in the previous year. However, Indian industry has witnessed an improvement in the economy with recent pickup in high speed indicators such as Purchasing Managers Index [PMI]. Findings of the CII ASCON industry survey for the first quarter of fiscal 2016 also indicate a reversal from slowdown to recovery adding to evidence that Indian economy is looking up despite many challenges. A stable Government at the Centre has initiated structural reforms including Make in India, to put the economy on an accelerated growth path which, in due course, will open up further opportunities for the manufacturing sector and consequent economic growth in India.
c] Segment-wise or Product-wise Performance
Your Companys business activity falls within a single primary business segment viz. bottles/containers. As such there are no separate reportable segments as per Accounting Standard-17 issued by the Institute of Chartered Accountants of India.
Capacity expansion is on the anvil of your Companys existing plans. As part of several initiatives for up gradation of its facilities, the Company is in the midst of incurring adequate capital expenditure for relining of one of its furnaces with enhanced capacity and to adaption of the latest technologies and processes. This will help the Company to further strengthen quality standards and improve service level to become the most preferred supplier to our customers.
Considering the future prospects of glass packaging industry there is immense scope for growth. Your company is cautiously optimistic for coming years in spite of stiff competition from recent entrants in the business.
e] Risks and Concerns
Your Company operates mainly in the domestic market and has limited exposure to foreign exchange risks. However, gas prices being linked to the US Dollar, the Company faces the risk of forex volatility to that extent. Further, gas prices are subject to revision by the Government on half yearly basis which is likely to have its impact on the Company. Apart from the said business risks, the volatility in global economies can have an impact on developing & emerging economies like India.
However, your Company is confident to counter these risks by continuous process improvements, cost reduction through re-engineering the products and resources of power and fuel. To reduce the impact of this risk, the Company is enhancing its connected load from the State Electricity Board and is also exploring the power trading option. The Company has duly adopted risk management plan for identification and evaluation of all potential risks and measures required to overcome these risks. Your Company has adequate insurance coverage for all assets and duly complies with all applicable safety norms.
Your Company is accredited for Quality Management System ISO 9001: 2008 certification and for Environment Management System ISO 14001: 2004 certification
g] Occupational Health & Safety
The Companys plants comply with all norms set up for clean and better environment by the competent authorities. The Company undertakes regular checks/inspections including certification for the maintenance of the environment. The Company values environmental protection and safety as the major considerations in its functioning. The Company has adequate effluent Treatment Plants to prevent pollution.
h] Human Resources and Industrial Relations
Employees being a key factor in achieving targeted performance, your Company encourage its employees to foster an attitude of continuous learning by conducting periodical training programmes. Industrial relations continued to remain cordial during the year.
i] Discussion on Financial Performance with respect to Operational Performance and state of Companys affairs
The financial performance matched its operational performance during the year under review. The Finance cost has dropped marginally because of lower utilization of working capital limits. However, the lower demand has affected the overall profitability.
Profit before tax was marginally lower mainly due to impact of gas price increase during the year. Marginally low sales during the year also contributed to lower profits.
The depreciation was charged on the basis of remaining useful life of Fixed Assets. The Company is a debt free Company and has earned income from its investable fund.
j] Cautionary Statement :
Management Discussion and Analysis describes Companys projections, expectations or predictions and is a forward looking statement within the meaning of applicable laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include gas price reviews, changes in economic conditions affecting demand and supply, price fluctuations in domestic and international market, change in Government policies, tax regimes, economic developments and other related and incidental factors.