The Directors are pleased to present the Management Discussion and Analysis (MD&A)
report for the year ended on March 31, 2023.
(A) INDUSTRY STRUCTURE AND DEVELOPMENT
Our company is a prominent manufacturer of metal containers. We specialize in producing
a wide range of Open Top Sanitary Cans (OTS) and General Purpose Cans used for packaging
Processed Food, Ready-to-eat Foods, Canned Vegetables, Fruit Pulps, Juices, Dairy
Products, and more. In addition to our existing product line, we have recently expanded
into manufacturing paint containers as well. Our manufacturing plant is located in
Kanjari, Gujarat, and is equipped with state-of-the-art imported Printing and Coating
Lines, Can Body Makers, and a Press Shop. The Ice-cream Cone Division of our company,
located at Vithal Udyog Nagar, Anand District, Gujarat, specializes in manufacturing
Rolled Sugar Cones. The division caters to the demand for Ice-Cream Cones from dairies in
Gujarat as well as other ice cream manufacturers. To ensure high-quality production, the
Ice-cream Cone Division is specifically equipped with imported equipment designed for
manufacturing Rolled Sugar Cones. We have expanded our production capacity, and currently,
the Sugar Cone Division has the capability to produce 1,500 lakhs (15 crore) cones per
annum.
Recognizing the growth of the ice cream sector in India, our company has strategically
installed a manufacturing facility for paper sleeves used in ice cream cones. This
expansion not only enhances our market position but also contributes to our overall
profitability. By offering paper sleeves along with ice cream cones, we are able to
provide a comprehensive solution to our customers while capitalizing on the opportunities
presented by the thriving ice cream industry in India.
(B) OPPORTUNITIES, THREATS AND CONCERNS
Our company holds a prominent and well-established position in the tin packaging
industry in India. The growth of the fast-moving consumer goods (FMCG) sector acts as a
catalyst for the packaging industry. Key driving segments within the packaging industry
include essential products such as food, beverages, dairy products, vegetables, fruits,
and fruit pulp. We are aware of the emerging opportunities in the can manufacturing
sector, both domestic and international market. We are committed to seizing these
opportunities and leveraging them to the utmost advantage of our shareholders.
Opportunities a) Our company is a prominent manufacturer of Open Top Sanitary
Cans (OTS) and General Purpose Cans. In the year under review, we achieved the sales
turnover of Rs. 23,823 lakhs. With a robust installed capacity of 18,000 MT per annum and
a wide customer base, our can business presents an excellent opportunity to secure a
substantial market share and strengthen our position in the industry. b) The government
policies aimed at promoting food processing units and increase in online purchases will
create favorable conditions for the packaging sector, including metal packaging. These
developments are expected to unlock new opportunities for the Can Division of our company.
With the growing demand for processed food products and the increasing need for efficient
and secure packaging in the e-commerce space, our Can
Division is well-positioned to leverage these opportunities and expand its market
presence. We are committed to capitalizing on these trends to drive growth and success for
our company. c) Innovation and product development The Company continues its efforts in
innovation and product development.
The Company has state of the art 3 Piece welded can making line from Switzerland to
produce cans @400 cpm.
The line further consists of Combination machine, where spin flanging, beading and
seaming takes place in one unit. Cans are then palletized on automatic Palletizer, which
ensures untouched hygienic automatic palletizing, strapping, wrapping of the cans as
against age old carton packing. Additionally, in can division the company has also
enhanced its coating and printing facilities. Furthermore, the Company has installed a new
sheet feed press, exemplifying its ongoing dedication to improving productivity. This
latest addition strengthens the Companys continuous efforts to enhance its manufacturing
processes and optimize productivity levels. d) Professional and technically qualified
human resources The Can Division operates with its own independent, experienced, and
qualified management team and workforce at its plants. While policy-level decisions, such
as major raw material procurement, sales, and accounts, are handled by the Mumbai Head
Office, the Can Division maintains autonomy in its day-to-day operations.
To foster a harmonious industrial relations environment and promote discipline, the
Company has implemented a conscious recruitment strategy of hiring workers and supervisors
from the surrounding towns and villages. This approach ensures a closer connection to the
local community and facilitates better understanding and cooperation between the Company
and its employees.
Furthermore, the Company encourages a democratic style of workers representation in
all discussions pertaining to their welfare and wage issues. This inclusive approach
ensures that workers have a voice and actively participate in matters that directly impact
their well-being. The Company thus, strives to maintain a positive and collaborative work
environment.
Threats fluctuations a) Raw material price Frequent in raw material prices pose a
significant threat to the metal packaging industry. The squeeze on margins, caused by
increased raw material prices, rising energy costs, transportation costs, and labour costs
is putting enormous pressure on the company. Additionally, the restrictions imposed by the
Bureau of Indian Standards (BIS) on tin plate and aluminum foil further limit the
available sources of supply, thereby impacting the companys profit margin. b) Competition
from unorganized sector - The Can Division has been operating for over six decades and has
maintained an unblemished track record with all its customers. Over the time, it has
established itself as one of the leading Can suppliers in the country and holds a
prominent position in the western region. However, the company faces a significant threat
in the form of competition from unorganized sectors, which poses a challenge to its growth
prospects. c) Alternate packing material - Competition from substitutes, such as plastic,
aluminum and other flexible packaging materials, poses a threat to the tin container
industry. These alternatives have gained some market share due to their price advantage.
However, tin containers offer distinct advantages in terms of convenience, branding, and
shelf life compared to other packaging options. Despite the competition, the tin container
industry holds its ground due to these unique attributes. d) Lower margins -
Traditionally, can sales are highly price-sensitive. This dynamic has led to lower profit
margins and has inadvertently encouraged the growth of the unorganized sector within the
industry. It is worth noting that the can industry has always been characterized by low
margins and high volumes. f) The profitability of the Cone Division is being impacted by
increasing competition from the unorganized sector in Cone supplies. This competition
poses challenges for the Cone division, to maintain profitability.
(C) OUTLOOK
Your company continues to maintain its relatively stable and progressive growth
outlook. The initiatives taken by your company for technology upgradation, reducing costs,
improving operating parameters etc. will enable the company to face challenges in the
coming times. The company has a vision to consolidate its position as a market leader in
the metal packaging segment and is in the process of upgrading infrastructure and
equipments. Accordingly, we will continue our efforts to improve our efficiency and
margins.
(D) RISK
There is a trend towards alternative packaging options that are cheaper compared to
metal packaging, but they typically have a shorter shelf life. Despite this, metal
packaging still holds an advantage over them in terms of shelf life, sustainability, and
other factors.
(E) INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
In the opinion of the management, there are adequate internal control systems and
procedures in place that are commensurate with the size of the company and the nature of
its business. The company has engaged the services of an independent Chartered Accountants
to conduct internal audits and ensure that the recording and reporting processes are
adequate and accurate, and internal controls are within the system, and necessary measures
are taken to update the internal control system from time to time.
(F) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
The company has achieved a total sales turnover of Rs. 25,463 lakhs for the year ended
31st March 2023, compared to Rs. 23,550 lakhs in the previous year, representing a growth
of 8%. This growth can be attributed to various factors, primarily the increased demand
from our valued customers.
During the year under review, the Company has achieved a sales turnover of Rs. 23,823
lakhs of metal cans and its components as compared to Rs. 22,281 lakhs in the previous
year, thereby registering an increase of 7%. The Company has executed export orders worth
Rs. 412 lakhs of metal cans and its components during the year under review as compared to
Rs. 369 lakhs in the previous year.
The Sugar Cone Division has achieved a sales turnover of Rs.1,553 lakhs, compared to
Rs.1,217 lakhs in the previous year .
(G) Details of significant changes (i.e. change of 25% or more as compared to the
immediately previous financial year) in key financial ratios, along with detailed
explanations therefore, including:
Key financial ratios: |
2022-23 |
2021-22 |
| Debtors Turnover Ratio |
15.08 |
17.46 |
| Inventory Turnover Ratio |
5.03 |
4.44 |
| Interest Coverage Ratio |
74.72 |
84.14 |
| Current Ratio |
2.75 |
2.41 |
| Debt Equity Ratio |
0.35 |
0.41 |
| Operating Profit Margin |
7.06% |
10.02% |
| Net Profit Margin |
4.51% |
6.23% |
i. The Operating Profit Margin Ratio and Net Profit Margin Ratio is decreased due to
increase in Cost of raw material and other operating cost. ii. The Interest Coverage Ratio
indicates optimum use of working capital limits. iii. The Debtor Turnover ratio is
improved due to companys collection of accounts receivable is efficient and that the
company has a high proportion of quality customers that pay their debts quickly and in
time. iv. A low debt-to-equity ratio indicates a lower amount of financing by debt. v. The
Inventory turnover ratio measures how fast a company sells its inventory. The higher ratio
implies strong sales.
(H) Material Developments in Human Resources/Industrial Relations Front, Including
Number of People Employed.
As of March 31, 2023, the company had a total of 200 permanent employees working at its
Kanjari and GIDC
, factories, Anand Admin Office and Head Office in Mumbai. The company places great
importance on the value of its employees and acknowledges their contributions. To foster a
motivated workforce, the company ensures that employees receive proper encouragement, both
in terms of moral support and financial incentives. This approach aims to create a
positive work environment and cultivate a sense of motivation and dedication among the
employees.
The Company prioritizes maintaining a constructive and positive relationship with its
employees, fostering a work environment that encourages productivity and efficiency. The
company values the contribution of its team of qualified personnel, whose expertise
enhances the overall performance of operations and processes. Throughout the year under
review, the Company enjoyed staff cordial relationship with its workers and at all
levels of management.
This harmonious atmosphere promotes collaboration, teamwork, and mutual respect, which
ultimately supports the Companys success and growth.
(I) CAUTIONARY STATEMENT
Statements in the Boards Report and the Management Discussion & Analysis that
describe the Companys objectives, expectations, or forecasts may be considered
forward-looking in accordance with the applicable securities laws and regulations. It is
important to note that actual results may differ materially from those expressed in these
statements. There are various factors that could influence the Companys operations,
including global and domestic demand and supply conditions that impact the selling prices
of finished goods, availability and prices of inputs, changes in
Government regulations and tax laws, economic developments within the country, as well
as other factors such as litigation and industrial relations.
These factors are subject to uncertainties and risks, and the Company does not assume
any obligation to update or revise any forward-looking statements to reflect events or
circumstances that may arise after the date of the report.
It is advised that stakeholders and investors exercise caution and rely on their own
analysis and judgment when evaluating the Companys objectives, expectations, and
forecasts.
(J) GREEN INITIATIVE APPEAL
Members are informed that the Ministry of Corporate Affairs has introduced the Green
Initiative in Corporate
Governance, allowing companies to adopt paperless compliance by utilizing electronic
modes. In line with this initiative, companies are now permitted to send various notices
and documents, including the Annual Report, to specifically shareholders through
electronic means, to their registered email addresses.
In order to contribute to this Green Initiative and promote the national interest,
members are kindly requested to register their email addresses at gogreen@kairacan.com and
companysecretary@kairacan.com. Alternatively, for those holding shares in dematerialized
form with depository participants, they are requested to inform their respective
depository participant of their email addresses.
By registering their email addresses, members provide their consent to receive all
future notices and documents, including the Annual Report, exclusively through electronic
mode. Additionally, members will also have the option to download the documents from the
Companys website, www.kairacan.com.
This initiative aims to reduce paper consumption and promote sustainable practices in
corporate governance.
Members are encouraged to actively participate in this green initiative and support the
companys efforts to minimize environmental impact.
DECLARATION REGARDING AFFIRMATION OF CODE OF CONDUCT
Your company has always encouraged and supported compliance to ethical business
practices in personal and corporate behaviour by its employees. Your company in order to
further strengthen corporate governance practices has framed a specific code of conduct,
for the members of the Board of Directors and Senior Management personnel of the Company.
As provided under Regulation 26(3) of the SEBI (Listing Obligations and Disclosure
Requirements), Regulations, 2015 all members of the Board of Directors and Senior
Management Personnel have affirmed compliance with Companys Code of Conduct for the year
ended March 31, 2023.
|
For Kaira Can Company Limited |
|
A. B. Kulkarni |
|
Managing Director |
| Place: Mumbai, |
|
| Date: 24th May, 2023 |
|
+91-9892691696
