HSIL Ltd Management Discussions.


As the third decade of the 21st century dawns on us, businesses need to acknowledge and equip themselves for a new era of transformation. According to the World Bank, developing economies are fast catching up with developed economies in the ease of doing business. Interestingly, businesses in the developing world are growing in scale, in global integration and are fast moving up the ladder of customer-centricity, innovation and technology adoption. They are crafting new pathways of excellence and value creation to make their presence felt in the global marketplace.

Excellence needs to be viewed through the long-term lens of value creation for all businesses. The year 2020 brings unprecedented times for businesses across the world, with the outbreak of the COVID-19 pandemic. Businesses worldwide, including India, have been affected due to large-scale lockdowns. However, proactive measures have been taken by the Government of India to contain the contagion and bring the economy back on track, including a special relief package focused on the poor and small businesses. Prime Minister Shri Narendra Modi also focused on providing impetus to the domestic industry with the new mantra of making India atmanirbhar (self-reliant) and urged people to become more vocal about locally produced goods. The pandemic has caused significant disruptions in the way businesses operate by making way for a socially distant world in the short-term. However, in the long-term, businesses that adapt to the new normalcy will thrive, while others may not.

The post-COVID-19 world will accelerate some existing trends and create new ones, and all business models will have to evolve in order to grow and thrive.

Our businesses were also impacted by the lockdown. The Packaging Products division operated at reduced capacity, since both the supply chain and distribution networks were disrupted by the lockdown. In building materials manufacturing, all major activities came to a standstill.

The markets are expected to take a while to recover and return to normalcy, as the entire economy has been severely affected by the coronavirus outbreak.

We believe that change is the new constant and are confident to unlock more value for all our stakeholders with a sound, purpose-led, performance-driven and efficiency-oriented business model, furthering our legacy of excellence.

Global Economy

As per the April 2020 estimates of the International Monetary Fund, global GDP grew by 2.9% in 2019, slightly lower than the 2018 growth of 3.6%.

The US-China trade wars, protectionism and auto industry slowdown in the Euro area on account of new emission standards were some of the major causes of the slow growth.

As the global economy was beginning to return to the path of growth with Phase-I signing of the US-China trade agreement and the fading of the Brexit uncertainty, when the deadly contagion struck. The COVID-19 pandemic has turned out to be a crisis like no other.

The scale of the outbreak, the level of containment measures required and the cumulative losses - to life, health and the economy - have triggered a global recessionary trend.


The growth trajectory of the global economy depends to a large extent on recovery from the COVID-19. The International Monetary Fund (IMF) predicts a negative trajectory for 2020 for majority economies of the world. World trade is expected to decline between 13% and 32% in 2020.

The IMF expects global growth to sharply contract to -3% in 2020 due to the economic disruption caused by the pandemic. While the advanced economies are expected to contract by -6.1%, the emerging market and developing economies are expected to contract by -1%.

With the baseline assumption of timely recovery from the COVID-19 by H2 of 2020, the recovery in 2021 is projected to be a V-shaped one, with world output growing by 5.8%. The advanced and emerging market and developing economies are expected to rise by 4.5% and 6.6%, respectively, in 2021.


Region-wise growth estimates

Region 2018 2019 2020 (P) 2021 (P)
World 3.6 2.9 (3.0) 5.8
Advanced market economies 2.2 1.7 (6.1) 4.5
Emerging markets and developing economies 4.5 3.7 (1.0) 6.6
Association of South East Asian Nations (ASEAN) 5.3 4.8 (0.6) 7.8
US 2.9 2.3 (5.9) 4.7
Euro area 1.9 1.2 (7.5) 4.7
UK 1.3 1.4 (6.5) 4.0
China 6.7 6.1 1.2 9.2
Japan 0.3 0.7 (5.2) 3.0
Russia 2.5 1.3 (5.5) 3.5

Indian Economy

India witnessed a cyclical slowdown in FY 2019-20, as growth slipped to 4.2% from 6.1% in FY 2018-19. During the first nine months of the fiscal, the Indian economy suffered a slowdown in domestic consumption demand, decline in manufacturing and investments amid the growing global trend of protectionism.

While the slowdown seemed to have bottomed out around Q4 FY 2019-20 and growth seemed to return, the deadly pandemic hit India. The government had to undertake some of the most unprecedented measures, including a country-wide lockdown for approximately two months. A country of 1.3 billion came to a standstill in the largest lockdown in history.

The general consumer price index (CPI) moved up to 5.91% in March 2020, compared to 2.86% in March 2019. The inflationary trend was most witnessed in food and beverages, which increased by 7.82%, followed closely by 6.59% for fuel and light, whereas the consumer food price index (CFPI) moved up from 135.9 in March 2019, to 147.8 in March 2020, as per the National Statistical Office press release dated 13 April 2020.

India made significant progress during the past few years, which is reflected in its improving global positioning. It ranked 63rd in the World Banks ease of doing business ranking, a jump from 77th position last year. In global innovations ranking, it moved to 52nd position from 57th in 2018. And in Logistics Performance, its position improved from 55th in 2018 to 44th this year.


The government was proactively decisive and introduced a host of measures, including corporate rate cuts, continued rationalisation of the Goods and Services Tax (GST) rate structure, speeding insolvency proceedings and sectoral reforms for auto, real estate, housing and export industries.

During FY 2019-20, India announced its target of becoming a US$5 trillion economy by FY 2024-25.

To achieve this ambitious target, the National Infrastructure Pipeline (NIP) was announced in the Union Budget 2020-21, with a spending commitment of US$1.4 trillion over the same period. The NIP will create jobs, enhance ease of living and provide equitable access to infrastructure. Rs 42% of the projects by value are under implementation, 32% are at the conceptualisation stage and the rest are under development.

The core sectors to benefit from the NIP are energy (24% of the total spending), followed by roads (19%), urban infrastructure (16%) and railways (13%), while other sectors like irrigation, rural infrastructure and so on, stand to receive single digit allocation from the pipeline. The US$5-trillion economy will make India a global economic powerhouse moving it from the 7th to 3rd position in terms of current dollar exchange rate.

With inflation staying within its comfort range for the larger part of the year, the Reserve Bank of India (RBI) monetary policy remained largely accommodative, instituting a cumulative 135 basis point cut in policy rates in 2019. Furthermore, to improve the economy, the RBI conducted Operation Twist, which involved simultaneous purchase and sale of government securities. This move of the RBI was aimed at lowering longer-term yields and aid in boosting the economy by reducing the cost of funds for borrowers. Additionally, the RBI implemented other measures like Cash Reserve Ratio (CRR) exemption, external benchmarking of interest rates and long-term repo operations to infuse liquidity in the market.


To provide a fillip to the domestic industry and cushion the impact of the COVID-19 pandemic, the Government of India has called for the Aatmanirbhar Bharat Abhiyan or Self-Reliant India Movement. The movement is anchored on the five pillars i.e. Economy, Infrastructure, Technology, Vibrant Demography and Demand.

A comprehensive economic package of Rs 20 lakh crore, equivalent to Rs 10% of Indias GDP, was laid down by the government to set this movement in motion.

Key highlights of the economic reforms are listed here.:

Liquidity infusion and other relief measures by the RBI

The prime measures introduced by the RBI to infuse liquidity in the system are policy rate cuts, reduction in CRR, increase in marginal standing facility, reverse repo rate cut, long-term repo operations, widening of policy corridor, raising of advance limits of states and overdraft limits, special refinance facilities for National Bank for Agriculture and Rural Development (NABARD), Small Industries Development Bank of India (SIDBI) and special liquidity facilities for mutual funds, apart from moratorium on terms loans and working capital interest and additional repayment time to real estate companies for loans from Non-Banking Financial Companies (NBFCs).

Pradhan Mantri Garib Kalyan Package

The governments Garib Kalyan package included a host of monetary and non-monetary measures for the vulnerable sections of the society, including food security and direct benefit transfers, insurance cover for the healthcare workers, increased wages for the Mahatma Gandhi Employment Guarantee Act (MNREGA) workers, packages for construction workers by state governments, Employee Provident Fund (EPF) credit to low-income wage earners, premature withdrawal of EPF, collateral-free lending for women self-help groups and supplementing of medical testing and screening.

MSME and industry-specific measures

The government focused specifically on reviving the Micro, Small and Medium Enterprise (MSME) segment with some innovative measures, such as collateral-free automatic loans for businesses, subordinate debt and equity infusion in MSMEs. In fact, the definition of MSMEs was changed to widen its reach. There is a disallowance of global tenders up to a pre-defined limit to provide a boost to domestic enterprises. Additional support through EPF contributions, special liquidity schemes for NBFCs/Housing Finance Companies (HFCs)/Micro Finance Institutions (MFIs), partial guarantee schemes for NBFCs, liquidity injection in power Distribution Companies (DISCOMs), relief to contractors and extension of registration and completion dates of real estate projects under Real Estate (Regulation and Development) Act are some of the initiatives for MSMEs and industries.

Other measures

Other measures included emergency health response package, relaxation of various statutory compliances, including extensions of timeline for deposit of various direct and indirect taxes, faster disposal of pending refunds and relaxation of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) norms.


The IMF projects Indias GDP to grow by 1.9% and 7.4% in FY 2020-21 and FY 2021-22, respectively, due to the great lockdown following the COVID-19 pandemic and subseguent recovery supported by the synchronised efforts from the government and the RBI.

The fallout from COVID-19 is being compared to the Great Depression of 1930. The pandemic is expected to induce demand side issues for all key sectors. According to a KPMG report, Potential impact of COVID-19 on the Indian economy, the housing and other real estate segments are expected to see a muted demand due to the lockdowns, and a majority of the action will be missing till H2 of FY 2020-21.

This will adversely affect the building materials sector. However, the packaging materials business is expected to witness demand, as consumers will over-stock commodities, giving fillip to FMCG sales and in turn packaging.

Economists expect global economic growth to gradually gain momentum, driven by investments and increased consumption.



Indias urbanisation has been different from most of the other countries; it is neither concentrated in a few cities nor dispersed. The World Economic Forum (WEF) predicts that by 2030, 40% of Indians will be urban residents. It will be the rise of many cities that will account for a large part of this.

The top nine metros and 31 boom towns ^^k will be significantly richer than other cities. Small urban and developed rural towns will also prosper. ^k

Consumer spending

The rapidly urbanising cities and towns in India are increasing consumption power. Be it air travel, smartphones, automobiles or online shopping, Indians are splurging more, in turn fuelling the economic growth. The WEF estimates that India will experience a 4x rise in consumption by 2030. The new Indian consumers are armed with higher disposable incomes as well as aspirations.

Digital access

With the advent of democratised internet access, intelligent products, and networked cities, the profile of Indias young and connected consumers will be much diverse than any other country.

The next decade will unlock a tremendous user base for consumption via mobile-first digital platforms.


The Union Budget acknowledges that India will have the largest working-age population by 2030. During the time, India will add Rs 90 million young households, which are likely to spend more than the preceding generations.

Packaging Products


Glass containers

The global glass bottles and containers market was valued at US$64.6 billion in 2019 and is estimated to grow at 4.20% CAGR over 2020-25, to reach US$79.36 billion by 2025. The growing demand for non-toxic packaging, and growth of alcoholic beverage and beer consumption, have resulted in augmenting the glass bottles packaging market growth.

Additionally, the inherent characteristic advantages of glass such as hygiene, aesthetic appeal, durability and the capability to preserve the aroma, strength, and flavour of the product makes it the most favourable option for packaging.

In terms of market share, Europe continues to be the largest market for glass bottles and containers. However, the Asia Pacific region is expected to register a significant growth compared to other markets due to the increasing demand of glass bottles and containers in pharmaceutical and chemical industries. These markets prefer glass packaging, owing to the inert nature of glass bottles. China, India, Japan and Australia among others are the prominent countries majorly contributing to the growth of the Asia-Pacific glass packaging market.

Indias glass container market is expected to grow at 6.8% CAGR during 2020-25. The low per capita consumption in the Indian market provides significant growth opportunities, in addition to rising consumerism, disposable incomes and urbanisation. Moreover, the supportive macro trends like growing alcohol and beer consumption and plastic ban in certain states are further going to strengthen the demand.

Source: Research & Markets; Mordor Intelligence

PET bottles and products

Polyethylene Terephthalate (PET) is a form of polyester capable of being shaped into different packaging, depending on the users requirements. Owing to its durability, resistance to microbes, moisture, solvents and alcohol, and multiplicity of usage, it has emerged as a packaging material of choice for businesses, especially in the food and beverages, personal care and pharmaceuticals segments.

Growing consumer awareness for packaged products, rising western influence, increasing consumption of carbonated beverages and ready-to-eat foods by young people further influence the use of PET packaging.

The global PET packaging market was valued at US$63.8 billion in 2018; and is expected to grow at 4.8% CAGR during 2019-24, to reach US$84.5 billion by 2024 (Source: IMARC Research). The beverage industry in India is primarily dominated by PET bottles, which hold a larger market share in beverage packaging in comparison to glass and plastic bottles. According to the Federation of Indian Chambers of Commerce & Industry (FICCI), Indians consume 11 kg of plastic per year in comparison to 109 kg by an average American, and this figure is further expected to rise in the coming years.

Source: IMARC Group; Mordor Intelligence

Security caps and closures

The global caps and closures market in 2018 was valued at US$41.17 billion. Going forward, it is expected to reach US$58.5 billion by 2026. The principal growth driver for the market is the continuous demand of the bottled drinks and beverages market. Apart from the usual growth of plastic caps and closures, the demand for security caps and closures is much higher, due to the abundance of counterfeit goods in the market. Companies are increasingly turning conscious of piracy and counterfeiting, as in the long run it impacts brand reputation and has other financial implications.

Souce: Reports & data

Growth propellers

Growing preference for spirits

Indias alcoholic drinks market grew by over 8.09% to US$48.86 billion in 2019. It is expected to grow at 6.8% CAGR between 2020 and 2023. With rising aspirations, affluence, changing lifestyles, participation of more women in social gatherings and casual drinking, the consumption of alcohol in India is likely to grow.

The expanding consumption rates act as vital growth drivers for our products.

Source: Statista; Community Against Drunken Driving (CADD) survey

Expanding beer market including craft beers

The demand for beer has been rising alongside growing inclination of the masses towards improved tastes of beer varieties. Craft beer is becoming extremely popular among young consumers owing to the availability of a variety of flavours, including malted barley, chestnut, and others. Indias beer market grew by 9.5% in 2019 to US$14.19 billion. The gradual acceptance of beer as a social drink, rising disposable incomes and preferences of the young consumer are also driving the growth of the beer market in India. It is projected to grow at 7.4% CAGR between 2020 and 2023.

Source: Statista and Business Wire

Growing pharmaceutical sector

Indias pharmaceuticals industry is the largest provider of generic drugs globally, supplying over 50% of the worlds vaccine requirements, fulfilling over 40% of the generic demand in the US market and over 25% of all medicine requirements of the UK. The export market in FY 2018-19 is valued at US$19.14 billion and US$13.69 billion in FY 2019-20 (up to January 2020).

The Indian pharmaceutical sector is expected to grow to US$100 billion by 2025. The governments initiatives for the sector, including the Pharma Vision 2020, and higher budget allocation, coupled with increased R&D spending by companies and higher Foreign Direct Investment (FDI) inflows are important growth drivers for this sector. The expanding pharma sector has widened the demand for our packaging products.

Source: India Brand Equity Foundation (IBEF)

Rising domestic consumption

The fourth largest industry in the Indian economy - the fast-moving consumer goods (FMCG) industry - is a significant contributor to the growth of glass and PET packaging. The retail market size in India is expected to grow from US$840 billion in 2017 to US$1.1 trillion by 2020, with modern trade growing at a rate of 20-25%, boosting the revenue of FMCG companies. As the FMCG industry grows, the demand for our packaging materials is also expected to rise.

Source: IBEF

Higher usage of glass packaging

With the governments becoming increasingly environment-conscious, their efforts on the ban of single-use plastics have precipitated well and have made consumers also care for the environment, leading to lesser use of plastic packaging materials. This, in turn, has increased the demand for glass containers. Glass packaging is finding an increased usage in the food packaging industry for factors such as their ability to preserve the aroma, taste and flavour, over and above the aesthetics and environmental benefits.

These factors are encouraging increased usage of glass and promoting it as a preferred packaging material.

Increased product security with counterfeit-resistant products

Counterfeiting and product piracy are increasingly becoming harmful - both for the companies and consumers alike. Companies are thus investing significantly to guard against this menace. Counterfeiting is rampant across beverage, alcohol, pharmaceuticals, oil and lubricant sectors, leading to adverse consequences. Counterfeit-resistant security caps and closures, with features like improved sealing, ease of use and multiple design possibilities at moderate rates offer an effective solution to these problems.


Our Packaging Products division comprises three segments, namely glass containers (including specially coloured glass and Greendrop Glassware - our consumer bottles business), PET bottles and products and counterfeit-resistant security caps and closures. During FY 2019-20, we introduced Greendrop Glassware, our new wellness, eco-friendly offering in the consumer bottles segment. We are one of the leading container glass manufacturers in India with a strong market share. We currently have two glass manufacturing facilities at Hyderabad and Bhongir in Telangana with a combined daily production capacity of 1,600 tonnes.

We manufacture lightweight glass bottles using narrow neck press and blow technology on several lines.

Currently, we offer customised products and solutions in PET through our three state-of-the-art facilities at Selaqui in Uttarakhand, Sangareddy in Telangana and Dharwad in Karnataka with a combined annual production capacity of 10,166 tonnes. To strengthen our capacity utilisation and achieve backward integration, we forayed into manufacturing seat covers and PVC cisterns.

Our venture into the security caps and closures business, in synergy with our existing packaging products, is aligned with the market requirements to counter pirated products and provide patented, anti-counterfeiting solutions. The manufacturing of security caps and closures in the state-of-the-art plant at Sangareddy in Telangana commenced in 2018 and aids in preventing counterfeit liquor and edible oils.


AGI glaspac

Glass containers segment

• 96 new products developed

• 53 new products commercialised

• On track to achieve our glass reduction objective by various weight reduction measures

• Spiral classifier - innovative technology to remove light-weight particles from cullet, operational at Hyderabad plant

• Started using 8.5 MW rooftop and ground-mounted solar power plants

• Installed Effluent Treatment Plant (ETP), reducing water usage, promoting reuse of water and ensuring zero liquid discharge

• Explored new export markets for enhancing global prominence and reach

• Achieved value savings through import substitution for machine parts

• Installed Electrostatic Precipitator (ESP) to achieve reduction of Sulphur Oxide and Nitrogen Oxide (SOx and NOx) levels from flue gas system

• Initiated towards digitisation and loT and now we have an electronic library offering and e-tenders

Garden Polymers

PET bottles and products segment

• Entered the flavoured drink market

• Developed new innovative packaging for a leading adhesive company in collaboration with a global chemicals company

• Introduced innovative designs for Child-Resistant Caps (CRC), which were well received by the market

AGI Clozures

Security caps and closures segment

• Enlisted business with all key spirit manufacturers in the country and overseas market

• 375 kW solar plant operational

• Differentiation with value-added facilities like printing and hot foiling

• Introduced high tech laser printing

Introducing our new healthy, eco-friendly offering

Greendrop Glassware

With a new and exquisite range of water, juice, milk bottles and food storage jars, Greendrop Glassware offers a range of glass tableware and kitchenware helping consumers to eliminate harmful chemicals present in other storage containers and live healthier lives. We also help in eradicating pollution from the use of non-recyclable materials for storage as glass is 100% recyclable.


Indias packaging industry underwent numerous changes across all the consuming sectors in FY 2019-20, with environmental discussions gaining traction due to high reliance on plastic packaging in pharmaceuticals, greater demand for rigid packaging with rising modern trade, Food Safety and Standards Authority of India (FSSAI) regulations in the food and beverage sector that replaced the 2011 regulations to make packaging tamper-proof by delivery apps after a tampering mishap at a food delivery app went viral. The overall packaging industry is expected to grow at a steady pace, with newer regulations and stringent norms, and increased emphasis on environmental responsibility, clean and safe packaging solutions across all sectors.

With the growing demand of the pharmaceutical sector and the rise of online businesses in the retail and food and beverage sector, packaging is receiving renewed attention from all sectors. We, as one of the leaders in glass, PET and caps and closures business, intend to craft world-class products, customised to the requirements of our customers, and furthering our decades-long legacy of excellence, innovation and customer centricity. We plan to continue our focus on innovation, better capacity utilisation, cost optimisation and adding scale, where and as necessary, in a sustainable manner across all our manufacturing processes in order to add further value for our stakeholders. We will continue to use our market expertise to identify and deliver, making use of the most valuable growth opportunities.

Building Products



India ranks second in the world in the sanitaryware industry, which in 2018 was estimated to be Rs 4,800 crore.

The market growth has been flat for over a few months now. However, higher disposable incomes, better standards of living and increasing preference for premium products mean that despite the slump, demand is going to revive for sanitaryware products.

This past year, large sanitaryware producers focused on the young brand-conscious consumers, with emphasis on design, quality and ease of use, leveraging innovation and technology. At the same time, focus sharpened on hygiene in both urban and rural areas. The trend of moving towards branded products is expected to pick up momentum, amid growing awareness for sanitation.


The faucets market in India is valued at 9,000 crore.

The industry is scaling up and is expected to outpace the sanitaryware industry growth.

Dynamism in the home-buying pattern and rapid urbanisation, combined with nuclearisation paves the way for an evolving market. A higher preference for premium bathrooms and functional kitchens generates higher demand for faucets that are contemporary in design and innovative in function. Organised players, constituting more than 50% of the market, tend to gain from this transition. Other factors that enhance demand include supportive government policies and higher upgrade renovation spends.

Plastic pipes and fittings

A growing plastic piping industry is vital to Indias infrastructural development and within this segment, Polyvinyl Chloride (PVC) pipes are one of the most versatile plastic pipes. The size of the PVC market is estimated to be Rs 31,500 crore and the unplasticised PVC (UPVC) accounts for a major share of this market. Chlorinated PVC (CPVC) pipes, however, are fast gaining ground on account of their high temperature applications.

The organised sector constitutes 70% of the PVC market in India. With experts anticipating both urban and rural areas in India to suffer from water scarcity, there is likely to be a greater demand for scientific water management systems. Consequently, major players in Indias PVC pipes market are now devoting efforts in cost-effective, time-saving technologies that will help draw and transport water.

Source: Elara Securities

Growth propellers

Government initiatives

The governments steady efforts to set up clean drinking water systems and public sanitation facilities are important drivers for the growth and scalability of the sanitaryware industry. The Union Budget 2020-21 has allocated Rs 30,478 crore for the Jal Shakti Ministry. The Jal Jeevan Mission, which is geared to ensure water security across India, was allocated Rs 11,500 crore for the year 2020-21 in the budget. 12,294 crore has been earmarked for Swach Bharat Abhiyan that was kickstarted in 2014 to discourage open defecation. Moreover, stricter implementation of the GST will enhance growth prospects for organised players.

Building new India

The governments push for projects such as Smart Cities and Affordable Housing for All through the Pradhan Mantri Awas Yojana, together with the transition from joint to nuclear families, is further driving the demand for building materials.

Greater replacement demand

With higher focus on home renovation by Indias brand-conscious citizens, replacement cycles are shortening. At 10-12% of the total demand, it is expected to be a major growth driver going forward.

Source: ICICI Securities

More spending power

Indias per-capita monthly income is estimated to have grown by 6.8% to Rs 11,254 during FY 2019-20.

Rising spending power continues to support the businesss growth. Aspiring consumers, with their growing appetite for an aspirational lifestyle, are willing to pay a premium for products that reside at the higher end of the spectrum.

Source: Ministry of Statistics and Programme Implementation

Emergence of smart bathrooms

Todays consumers are significantly adopting the concept of a smart bathroom with modern and smart accessories. Internet of Things (IoT) and the concept of internet-supported intelligent devices have succeeded in the expansion of smart toilets and bathrooms.

The availability of smart residence gadgets at economical prices is additionally boosting the growing requirement for smart showers.


We sustain our legacy of excellence by innovating around customers requirements. Over the decades, we have played a pioneering role in the sanitaryware and faucet manufacturing and continue to be a leading presence in this segment. We work closely with our research and development team to introduce products that we think are industry musts.

Our Building Products division offers a wide range of extraordinary products across sanitaryware, faucets and plastic pipes and fittings segments.

To enhance our relevance as a complete bathroom solutions provider, we tapped into the plastic pipes and fittings segment (comprising PVC, CPVC, UPVC and Soil-Waste-Rain or SWR) a couple of years ago. As a part of this segment, we offer solutions to the building construction domain for potable water transportation, water harvesting, underground drainage and sanitation applications.


Sanitaryware and faucets segment

• Developed 53 new Stock Keeping Units (SKUs)

• Installed robotic system to increase efficiency and consistency that further enhance the quality of the products

• Set up pressure casting machines for wash basins, increasing productivity in terms of effective space utilisation, and lowering dependence on manual labour

• Installed additional equipment in faucet plant to reduce process losses, thus aiding in cost saving during FY 2019-20

• Commissioned Computer Numerical Control (CNC) machines in various processes like grinding, low-pressure die-casting, turning and testing. These CNC machines improve the accuracy of processes and consistency of output

• At Bibinagar plant, partial conversion of energy source in processes from Liquefied Petroleum Gas (LPG) to natural gas during FY 2019-20; we expect to fully convert to natural gas by the end of FY 2020-21. In addition to it, process wastage reduced during place together in the same line benefiting with improved cost structure

• At Bahadurgarh plant, production of critical design SKUs increased substantially

Plastic pipes and fittings segment

• Introduced 43 innovative SKUs; new ranges introduced in the CPVC and SWR products

• We received the Indian Green Building Council (IGBC) platinum rating for our entire manufacturing process in FY 2019-20; we are the 8th company in India to receive this coveted certification

• Completely automated the entire manufacturing process, except for loading/unloading of pipes

• Minimal waste generating manufacturing process


During FY 2019-20, we at HSIL have undertaken numerous modernisation and technology upgradation measures. The automation and robotics-oriented approach was piloted across some of our facilities, to improve consistency and enhance the quality of our offerings. Now that we have successfully piloted these projects and have our learnings in place, we intend to mainstream automation across all our facilities.

In the plastic pipes and fittings segment, we expect to enhance our utilisation levels to industry-best levels within the next 2-3 years.

We expect business uncertainty to prevail in the markets at least up to H1 FY 2020-21, led by the impact of the COVID-19 pandemic. Businesses will start recovering and gaining pace from Q3-Q4 FY 2020-21, as we hope the fear of the contagion to fade away with proper management and advances in medicine.


The outbreak of COVID-19 has caused global widespread economic disruptions leaving uncertainties with respect to severity and its impact on businesses, which currently cannot be reasonably ascertained. The Company has up to the date of approval of financial results, evaluated and factored in to the extent possible likely material events and circumstances arising from COVID-19 pandemic and their impact on carrying value of its Assets & Liabilities as at 31 March 2020. Based on current indicators of future economic conditions, the Company expects to recover carrying amount of its Assets as on 31 March 2020.

The impact of any future events and developments emerging out of COVID-19, if any, and occurring after the balance sheet date and relating to the Assets & Liabilities of the Company as on 31 March 2020 will be recognised prospectively. Considering current market scenario and the Companys quality product portfolio, brand image, long-standing relationships and goodwill with its customers, suppliers and other stakeholders, the Company expects that the business operations, cash flows, future revenue, assets and liabilities will sustain going forward.

People at HSIL

We have created an inclusive and diverse work culture with shared values and a common purpose. Our peoples hard work, dedication and entrepreneurial spirit sit at the heart of our business. On 31 March 2020, the total workforce strength stood at 2,891.

Our HR strategy and roadmap seeks to provide an enabling environment where our colleagues can enjoy work, feel encouraged and are supported to grow.

This is achieved through our culture of collaboration, which gives every individual a sense of purpose and an opportunity to thrive. We help our people to develop their expertise, knowledge and skillsets, and amplify their contribution and impact.

With a view to make processes more transparent and data-driven, we launched a range of new tools this year. Some of these are:

• Human Resource Management (HRM) software:

We launched the HRM system, integrating all our people processes online. The digital tools artificial intelligence drives faster processing and data sharing, and greater engagement, resulting in higher productivity, lower employee turnover, reduced costs and lower risk of non-compliance and policy violation. With the right communication and regular training camps, we enabled a seamless shift to the software. Over time, the softwares in-built analytics component is expected to help us make informed decisions about our teams

• Performance Management (PM) software: Another powerful tool, the PM system selects high-potential and high-performing employees to strengthen our talent pipeline and succession planning

• Learning Programs for Accelerated Development (L-PAD): The online portal for e-learning, L-PAD helps employees learn on the go and at their own pace. Employees can gradually complete professional training courses, fulfil their learning ambitions and progress in their careers. With a cloud-based learning management dashboard, these courses can be accessed from anywhere, any time and on any device - effectively letting employees take control of their own learning curve

As the business transforms, we are evolving our culture to ensure that we continue to attract the best people possible to build their careers at HSIL. Thus we are implementing more employee-centric activities and engagement programmes to ensure a great, safe, inclusive and diverse place to work for our people.

Risk Management

We at HSIL relentlessly focus on managing a risk-optimised business. Our risk management framework identifies and assesses risks and monitors the effectiveness and efficiency of risk mitigation and control measures. The major risks identified by businesses are systematically addressed through appropriate mitigating measures.


We review and validate our risk appetite at regular intervals. This is integrated into our overall risk management framework to support better decision-making and prioritisation.

Our risk appetite is driven by the following concerns:

Growth ambition

We operate in a competitive, dynamic sector and aggressively pursue growth opportunities. This entails calculated risk-taking and mitigation.


Abiding by relevant legislations as well as our business principles is a habit that is embedded in our culture and underpins our strategy.


We strive to protect the value and reputation of the brand, prioritise the interests and safety of our customers and employees, and support responsible growth.


We seek to continuously improve our operational efficacy to enhance our competitiveness.


Our risk framework is structured around the following categories of risk:

Here, we report the principal risks, which we believe are likely to have the greatest current or near-term impact on our business.

Our senior executives of various functional units are responsible for tracking and monitoring the key risks for the divisions periodically and implementing suitable mitigation plans proactively. During FY 2019-20, we expanded the scope and coverage of the risk framework across the Company.


Lack of business decisions or failed decisions may pose a strategic risk to the Company. Strategic risk is often a primary factor in determining a companys worth, particularly if the company experiences a sharp decline in a short period of time. We have tried to evaluate relevant factors and their mitigation measures for what may be categorised as strategic risks.

Economic uncertainties A slowdown of the Indian economy may lead to a fall in demand for our products India continues to be an attractive investment destination among the emerging economies, driven by demand factors such as growing consumer affluence, the governments infra push, and rapid urbanisation. However, there has been moderation in growth estimates. Our business diversification into varied sectors has ensured that there is no overdependence on any specific sector, safeguarding us from any sudden industry shocks.
Volatility in real estate industry A slowdown in the growth of real estate in the nation could impact our sales and revenue The implementation of the Real Estate (Regulation and Development) Act ensures the elimination of dubious players. Also, the demand for affordable and middle-income housing is expected to drive growth both in the metros and Tier-II cities in the coming years. Moreover, we are not completely dependent on any one sector for revenue.
Rising competition and entry of multinational players Increase in competition can lead to lower sales and market share. Similarly, the entry of global players with an extensive market reach can disrupt the sectoral equilibrium We have been in the industry for six decades and our high-quality and innovative products, cost-effective production, experience, timely delivery, diversified business, have enabled us to succeed in this competitive market.
Inability to gauge preferences In a dynamic market environment, where preferences evolve fast, inability to gauge customers preferences can dent our market share To grow our wide range of products, we are constantly seeking feedback for innovations in each product segment from our institutional customers. This helps us unveil new products to cater to evolving end users aspirations.
Dependence on a few customers An excessive dependence on a few clients can affect sales We have a loyal customer base across different industries mainly comprising institutional customers. Our Company has always focused on building long-term and rewarding association with clients across industries.
Geo-political risks Geo-political factors may have an impact on the smooth running of businesses Our diverse product offerings in different industries and reach in different markets help us mitigate any kind of over-dependence on any product or market.
Regulatory risks Any changes in the regulatory scenario may affect business adversely We have a multi-channel distribution network helping us mitigate any kind of regulatory risks. For example, if the PET segment faces any regulatory hindrance, due to environmental factors, our glass packaging is well poised to capture the lost market-share
Tariff wars Any trade row between exporting partner countries may impact our business Exports contribute a very small part of the overall revenues. Hence, impact of tariff war, if any, may not significantly affect our revenues


Any uncertainty causing an organisation to generate inadequate profits or even losses are termed as business risks. Our risk management team has tried to evaluate the relevant applicable business risks and mitigation measures.

Unorganised sector Low-priced products from unorganised players can erode our market share Threat from the unorganised sector is gradually being mitigated with industry consolidation following GST implementation. Besides, our innovative products cater to a wide spectrum of discerning consumers with varied aspirations.
Lack of innovation Inability to remain relevant in the market through the identification of current trends and breakthrough innovations We keep ourselves abreast of the latest trends through thorough market research and regular feedback from institutional customers. Our talented R&D team is working relentlessly to leverage advanced technologies and unveil innovative products in line with consumer requirements.
Lack of prominence Ineffective marketing and distribution can hinder sales and business growth Strengthening the distribution network is a continuous exercise that we conduct. As a premium B2B player, we constantly focus on growing our institutional customers
Team of go-getters Low employee competencies and inadequate experience could impact our growth We have a stringent hiring process and have ensured that there are qualified and competent personnel at key positions for hassle-free execution.
Also, we encourage our employees through various engagement programmes and organise industry-specific training regularly. Employees are rewarded with attractive rewards and remuneration programme for exemplary performance.
Working capital management Inability to meet short-term liquidity requirements can impact growth and profitability We always strive to improve our working capital requirements by optimising inventory and receivables cycle and extending our payables cycle.
Threat from PET packaging Rising demand for PET packaging could hurt the sales of glass container business Our glass business is seeing a steady rise in sales due to various eco-friendly measures being undertaken in the world. Besides, our presence in the PET segment ensures any loss of sales in the glass segment is met by the PET segment.
Quick product turnover Fast product turnover burdens the inventory excessively Our robust inventory management ensures there is appropriate mapping of SKUs for gradual phasing-in and phasing-out. Comprehensive analytics is employed in planning the timely replacement of SKUs so as not to impact revenue generation.
Interest rate, commodity price recession risk Any adverse movements in interest rates or commodity price recession may impact business revenues We review our short-term and long-term interest rates at regular intervals to ensure the cost effectiveness. The Company has policies in place to manage its exposure to fluctuation in the prices of key raw materials.


Ineffective procedures, systems or policies may result in operational risks. These risks are identified and mitigated by our risk management committee.

Inadequate raw material availability Inability to source regular supply of raw materials at optimum price can adversely affect operations Strong relationships with multiple vendors for procuring our raw materials help us avoid dependence on a few. Besides, we engage with our vendors repeatedly to plan our raw material inventory pipeline.
Quality issues Lowering or variation in product quality can affect sales and cause customer attrition We do not compromise on product quality and thus have aligned quality checks across our manufacturing chain with global standards. Following manufacture, our products undergo a series of quality checks to ensure we have low rejection rates and minimal customer complaints.
Operational bottlenecks Constant disruption in operations could hamper production Our state-of-the-art facilities with global manufacturing practices, along with automation help improve processes and product quality
Credit standing Inadequate funds may impact the daily operations of the Company Enduring lender relationships and a high credit profile have ensured that funds are readily available to the Company at competitive costs.
Rising costs structure Inability to achieve higher cost efficiency may affect profitability We adopt best practices and standards across our manufacturing facilities and have increased operating efficiency through product planning, increased utilisation rates and reduced production cost across our manufacturing facilities. Also, we conduct detailed reviews to identify areas where we can reduce our raw material and energy costs, without compromising output quality.
Product failure and differentiations Any adverse market reaction to any of our products leading to its failure may affect the revenues We cater to a multi-industry, multi-product clientele. Our range of products is quite vast, and failure of any single product or a single range may not be able to materially affect the revenues of overall business. Our R&D initiatives are relentlessly focused on developing innovative products, as per consumer preferences.
Health & safety risks Any unfortunate incident may lead to loss of life and/or economic losses Our focus on employees health, safety and wellbeing help us mitigate most of the risks in the manufacturing and operational situation. Additionally, our plants and products have received various certifications and accolades for leadership in EHS activities.
Loss of key managerial personnel (KMP) Any loss of KMP may adversely impact the business Our pay and rewards and recognition structure ensure competitive remuneration to our key managerial personnel, keeping them well motivated.
Loss of suppliers Any loss of suppliers may disrupt the normal business environment for the Company We have harmonious and long-term relations with all our suppliers and our vendors help in maintaining these relationships. Additionally, we maintain relations with multiple vendors, so as to mitigate the risk of over-dependence on any single vendor.
Currency fluctuations risk Any extreme fluctuations in currencies we do business in may impact our revenues and/or profits We regularly enter into a wide variety of derivative instruments like forward contracts, future contracts, etc. to hedge our foreign exchange position. Additionally, some of our foreign exchange positions act as a natural hedge to protect our financial position from foreign exchange risk


The internal control systems are commensurate with the size, scale and complexity of the operations of the Company. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with the applicable statutes, safeguarding assets from unauthorised use, executing transactions with proper authorisation, and ensuring compliance with corporate policies. The Company uses SAP, a well-accepted enterprise resource planning (ERP) system, to record data for accounting, consolidation, and management information purposes and connects to different locations for efficient exchange of information.

The Audit Committee of the Board of Directors, comprising Independent Directors, reviews the effectiveness of the internal control system across the Company, including the annual plan, significant audit findings and recommendations, adequacy of internal controls and compliance with accounting policies and regulations.


The Company has in place an adequate Internal Financial Controls framework. It has documented Risk and Control Matrices (RACM) covering all activities, and all controls are tested for design and operating effectiveness as part of its Internal Financial Control reporting framework.

The financial controls are evaluated for both design and operating effectiveness by an external consulting firm of repute.

In our view, the Internal Financial Controls are adequate and are in line with best practices applicable to organisations of a similar size, nature and complexity.


The Company has a robust risk management framework which identifies and assesses strategic, operational, financial and compliance risks and monitors the effectiveness and efficiency of risk mitigation and control measures. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continual basis.

Analysis of Financial Statements


BALANCE SHEET 2015-16 2016-17 2017-18 2018-19# 2019-20
Equity Share Capital 1,445.97 1,445.97 1,445.97 1.445.97 1,445.97
Reserve and Surplus 61,376.91 68,451.04 72,585.11 58.174.29 59,651.87
Share Premium 45,497.87 45,497.87 45,497.87 36.812.98 36,812.98
Business Reconstruction Reserve 30,419.59 29.608.83 29.398.19 29.177.01 27,776.99
Loan Fund * 64,157.30 74,099.96 1,09,562.20 88.845.92 1,00,628.23
Deferred Tax Liability 20,759.32 20,768.33 21.154.21 22.689.16 23,634.83
Other Long Term Liabilities (excluding trade deposits and Deferred government grant) 82.74 1,216.74 897.86 878.96 937.66
Long Term Provision 781.14 957.37 1,021.38 608.64 802.29
Total 2,24,520.84 2,42,046.11 2,81,562.79 2,38,632.93 2,51,690.82
Net Block (tangible and intangible including goodwill) 1,51,374.35 1,52,327.77 1,68,106.85 1,84,235.55 1,81,968.18
Capital Work-in-Progress (including capital advances) 8,197.36 20,726.86 23,781.09 11,670.38 3,299.81
Investments 3,261.91 3,503.53 3,455.34 2,007.13 1,173.12
Other non-current assets (including current tax) 7,839.60 11,624.82 9,343.11 12,636.27 10,981.45
Current Assets
Inventories 49.005.54 49.249.68 56.429.93 29,066.50 40,797.54
Sundry Debtors 38,757.49 39,717.19 51.408.55 32,312.82 29,303.69
Cash and Bank 1,882.98 3,281.62 5.975.07 3,933.68 4,749.68
Other Current Assets 5,050.34 6,774.95 10.990.76 7,958.25 14,565.30
Current Liabilities
Trade payables 15,360.23 19.660.37 21.736.61 18,571.87 19,522.30
Other Current Liabilities (other than current maturities of long term borrowings) 25,168.69 25,201.61 25,865.74 25,847.68 14,633.05
Short-term provisions 319.81 298.33 325.56 768.10 992.60
Net Current Assets (working capital) 53,847.62 53,863.13 76,876.40 28,083.60 54,268.26
Total 2,24,520.84 2,42,046.11 2,81,562.79 2,38,632.93 2,51,690.82

* Loan Fund = Non-current borrowings + Current borrowings + Trade Deposits + Deferred government grant + Current Maturities of long term borrowings- Current investments in mutual fund - Fixed deposit receipts.

#Note on restated financials: The Board of Directors of the Company in its meeting held on 10 November 2017 had approved a Composite Scheme of Arrangement under sections 230 to 232, read with section 66 and other applicable provisions of the Companies Act, 2013 and the provisions of other applicable laws, amongst the Company, Somany Home Innovation Limited, a wholly owned subsidiary of the Company (the "Resulting Company 1" or "SHIL") and Brilloca Limited, a wholly owned subsidiary of Resulting Company 1 ("Resulting Company 2") and their respective shareholders and creditors (the "Scheme"). The Scheme provided for demerger of (i) the Consumer Products Distribution and Marketing Undertaking ("CPDM Undertaking") and Retail Undertaking of the Company into Resulting Company 1, and (ii) the Building Products Distribution and Marketing Undertaking ("BPDM Undertaking") of the Company into Resulting Company 2. The Scheme was approved by the Honble Kolkata Bench of National Company Law Tribunal vide its order dated 26 June 2019, certified copy of the order dated 22 July 2019 was filed with Registrar of Companies, West Bengal on 5 August 2019 and accordingly the Scheme has come into effect. The Scheme is effective from the Appointed Date i.e. 1 April 2018. Accordingly, due effect of the Scheme has been incorporated with effect from the Appointed Date. The Ind AS financial statements of the Company for the year ended 31 March 2019 were approved by shareholders in its annual general meeting held on 2 September 2019 and subsequently to give effect of the Scheme, the comparative financial statements for the quarter and year ended 31 March 2019 have been restated.

STATEMENT OF PROFIT & LOSS 2015-16 2016-17 2017-18 2018-19# 2019-20
Gross Sales 2,05,489.91 2,19,803.48 2,25,284.77 1,59.199.35 1,83,950.22
Less: Excise Duty 14,974.01 15,492.15 3,500.03 -
Net Sales 1,90,515.90 2,04,311.33 2,21,784.74 1,59.199.35 1,83,950.22
Other Income 6,853.58 3,641.40 4,137.82 5,195.65 3,986.88
Total Income 1,97,369.48 2,07,952.73 2,25,922.56 1,64,395.00 1,87,937.10
Purchase of Traded Goods 40,551.39 43,940.06 54,683.70 - 4,602.94
Power and Fuel 23,248.41 24,528.80 28,097.13 34,920.39 35,228.03
Raw Material consumed, Manufacturing,Administrative and Other Expenses (including change in inventories) 75,082.21 81,466.12 84,044.39 88,106.69 96,222.64
Employee Cost 24,744.64 28,633.03 30,887.11 20,100.58 22,748.30
Total Expenses 1,63,626.65 1,78,568.01 1,97,712.33 1,43,127.66 1,58,801.91
EBITDA 33,742.83 29,384.72 28,210.23 21,267.34 29,135.19
Depreciation and Amortisation 11,443.31 11,083.31 11,403.99 13,130.72 14,287.64
EBIT 22,299.52 18,301.41 16,806.24 8,136.62 14,847.55
Finance Costs 4,104.72 3,335.86 5,575.92 5,897.59 7,347.63
PBT before Exceptional Items 18,194.80 14,965.55 11,230.32 2,239.03 7,499.92
Exceptional Items - - (654.15) - -
Profit before tax 18,194.80 14,965.55 10,576.17 2,239.03 7,499.92
Income Tax 3,351.62 4,889.31 2,788.64 869.87 1,294.15
MAT credit entitlement (497.04) (1,294.15)
Deferred Tax 3,215.06 (224.84) 311.45 339.17 2,658.31
Profit After Tax 11,628.12 10,301.08 7,476.08 1,527.03 4,841.61
Cash Profit 26,286.49 21,159.55 19,191.52 14,499.88 20,493.41


KEY PERFORMANCE INDICATORS 2015-16 2016-17 2017-18 2018-19# 2019-20
Networth * 1,08,320.75 1,15,394.88 1,19.528.95 96,433.24 97,910.82
Capital Employed 2,23,656.96 2,39.872.00 2,79.643.55 2,37,145.33 2,49,950.87
Average Capital Employed 2,27,065.29 2,31,764.48 2,59,757.78 2,58,394.44 2,43,548.10
Average Loan Funds 70,305.91 69.128.63 91,831.08 99.204.06 94,737.08
Cash Profit 26,286.49 21,159.55 19.191.52 14,499.88 20,493.41
Net Domestic Turnover 1,76,676.41 1,90,383.22 2,07,303.99 1,42,751.81 1,67,502.68
Export Turnover 13,839.49 13,928.11 14,480.75 16,447.54 16,447.54
Dividend (%) 200.00 200.00 200.00 150.00 150.00
Market Price - (?) (End of year at NSE) 278.30 349.85 371.20 250.50 40.35
Total Dividend Payout(including Dividend Distribution Tax) 3,045.50 3,480.57 3,480.57 3,486.30 2,615.40
Retained Earnings 8,582.62 6,820.51 3,995.51 (1,959.27) 2,226.21

* Networth = Equity Share Capital + Other Equity - Miscellaneous Expenses - Business Reconstruction Reserve

** Capital Employed = Networth + Loan Funds + Deferred Tax Liability + Business Reconstruction Reserve

# The figure are post Scheme of Arrangement.

BALANCE SHEET RATIOS 2015-16 2016-17 2017-18 2018-19# 2019-20
Return on Networth (%) 10.73 8.93 6.25 1.58 4.94
Return on Average Capital Employed (%) 9.82 7.90 6.47 3.15 6.10
Debt Equity Ratio (net) 0.59 0.64 0.92 0.92 1.03
Debtors Cycle (Days) 69 66 83 74 58
Inventory Cycle (Days) 94 88 93 67 81
Net Current Assets Turnover (Days) 103 96 127 64 108
Turnover/Net Current Assets 3.54 3.79 2.88 5.67 3.39
Turnover/Inventory 3.89 4.15 3.93 5.48 4.51
Turnover/Capital Employed 0.85 0.85 0.79 0.67 0.74
Turnover/Net Block 1.26 1.34 1.32 0.86 1.01
Net Block/Capital Employed 0.68 0.64 0.60 0.78 0.73
Working Capital/Capital Employed 0.24 0.22 0.27 0.12 0.22


STATEMENT OF PROFIT & LOSS RATIOS 2015-16 2016-17 2017-18 2018-19# 2019-20
Domestic Sales/Turnover 92.74 93.18 93.47 89.67 91.06
Export Sales/Turnover 7.26 6.82 6.53 10.33 8.94
Excise/Turnover 7.86 7.58 1.58 - -
EBITDA Margin (net sales) 17.71 14.38 12.72 13.36 15.84
EBIT Margin (net sales) 11.70 8.96 7.58 5.11 8.07
Pre Tax Profit Margin @ 9.55 7.32 5.06 1.41 4.08
PAT Margin 6.10 5.04 3.37 0.96 2.63
Goods Purchase for Resale/Total Expenses 24.78 24.61 27.66 - 2.90
Power & Fuel/Total Expenses 14.21 13.74 14.21 24.40 22.18
Manufacturing, Administrative and Other Expenses/Total Expenses 45.89 45.62 42.51 61.56 60.60
Employee Cost/Total Expenses 15.12 16.03 15.62 14.04 14.32
Interest Cover (times) 8.22 8.81 5.06 3.61 3.97
Cost of Debt (%) 5.84 4.83 6.07 5.94 7.76
EPS (Face Value Rs 2/-) 16.08 14.25 10.34 2.11 6.69
CEPS (Face Value Rs 2/-) 36.36 29.27 26.55 20.06 28.35
Book Value (?) 149.83 159.61 165.33 133.39 135.43

@ Before exceptional items

# The figure are post Scheme of Arrangement.

Change in Key Financial Ratios

2018-19 # 2019-20 Change over previous year %
(i) Debtors Turnover (days) 74 58 (22%)
1. Trade Receivables/Sale of goods*365
2. Trade Receivables includes the amount of Goods & Service Tax.
(ii) Inventory Turnover (days) 67 81 21%
Inventories/Sale of goods*365
(iii) Interest Coverage Ratio (times) 3.61 3.97 10%
EBITDA/Finance cost
(iv) Current Ratio (times) 1.17 1.45 24%
(Total Current assets/ Total current liabilities (including Short Term borrowings and Current maturities of long term borrowings)
(v) Total Debts to Equity Ratio (times) 0.92 1.03 12%
(Non-current borrowings including Current maturities of long term borrowings + Current Borrowings + Deferred Govt. Grant /Net worth*)
* Networth = Equity Share Capital + Other Equity - Miscellaneous Expenses - Business Reconstruction Reserve
(vi) Operating Profit Margin (%) 13.36 15.84 19%
EBITDA/Sale of goods
(vii) Net Profit Margin (%) 0.96 2.63 174%
Profit for the year / Sale of goods
Reason for changes:
Improved due to increase in Profit for the year

Note: We have incorporated the reasons for changes, where ever significant changes in key financial ratios are 25% or more compared to the previous financial year.

Details of any change in Return on Net Worth
Return on Net Worth (%)* 1.58 4.94 213%
Profit for the year / Networth
Reason for changes:
Improved due to increase in Profit for the year
* Networth=Equity Share Capital + Other Equity - Miscellaneous Expenses - Business Reconstruction Reserve

#Note on restated financials: The Board of Directors of the Company in its meeting held on 10 November 2017 had approved a Composite Scheme of Arrangement under sections 230 to 232, read with section 66 and other applicable provisions of the Companies Act, 2013 and the provisions of other applicable laws, amongst the Company, Somany Home Innovation Limited, a wholly owned subsidiary of the Company (the "Resulting Company 1" or "SHIL") and Brilloca Limited, a wholly owned subsidiary of Resulting Company 1 ("Resulting Company 2") and their respective shareholders and creditors (the "Scheme"). The Scheme provided for demerger of (i) the Consumer Products Distribution and Marketing Undertaking ("CPDM Undertaking") and Retail Undertaking of the Company into Resulting Company 1, and (ii) the Building Products Distribution and Marketing Undertaking ("BPDM Undertaking") of the Company into Resulting Company 2. The Scheme was approved by the Honble Kolkata Bench of National Company Law Tribunal vide its order dated 26 June 2019, certified copy of the order dated 22 July 2019 was filed with Registrar of Companies, West Bengal on 5 August 2019 and accordingly the Scheme has come into effect. The Scheme is effective from the Appointed Date i.e. 1 April 2018. Accordingly, due effect of the Scheme has been incorporated with effect from the Appointed Date. The Ind AS financial statements of the Company for the year ended 31 March 2019 were approved by shareholders in its annual general meeting held on 2 September 2019 and subsequently to give effect of the Scheme, the comparative financial statements for the quarter and year ended 31 March 2019 have been restated.


Certain statements in the Management Discussion and Analysis describing the Companys objectives and predictions may be forward looking statements within the meaning of applicable laws and regulations. Actual results may vary significantly from the forward-looking statements contained in this document due to various risks and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India, volatility in interest rates, new regulations and Government policies that may impact the Companys business as well as its ability to implement the strategies it devises for the future. The Company does not undertake the responsibility to update these statements.