Rollatainers Ltd Management Discussions.

INDIAN ECONOMIC OVERVIEW

Indian economy has continued to register growth in the year 2018-19. The prospect for economic growth became buoyant with the agrarian and rural economy benefiting from a yet another good monsoon. Though slow, but the growth has been steady as the new taxation regime i.e. GST is more or less stabilized. The financial year ended with GDP growth at around 6.7%. The retail inflation measured by year-on-year changes in the consumer price index (CPI) turned up in March 2019 to 4.28%.

Financial year 2018-19 was saw the stabilization of the Goods and Services Tax (GST), a single tax intended to replace the existing Central and State indirect taxes, which has come into force from July 2017.

Economic activity, as expected, has picked up in 2018-19, although there is usual uncertainty about the monsoon at this stage. Several lead indicators suggest some improvement in the economic outlook. The outlook for 2018-19 brightens as liquidity in the economy moves towards normalization, with expectations for early revival and growth in overall consumption across several sectors including food and beverage.

PACKAGING INDUSTRY

1. CONSUMER INDUSTRY

Packaging is among the high growth industries in India and developing @ 22-25% per annum* (as per report from the Packaging Industry Association of India) and becoming a preferred hub for packaging industry. Currently, the 5th largest sector of Indias economy, the industry has reported steady growth over past several years and shows high potential for continued growth and expansion, both in the domestic and export markets.

Costs of processing and packaging food can be up to 40% lower than parts of Europe which, combined with Indias resources of skilled labour, make it an attractive venue for investment. A high degree of potential exists for almost all user segments which are expanding appreciably-processed foods, hard and soft drinks, fruit and marine products. The Indian packaging industry has made a mark with its exports that comprise flattened cans, printed sheets and components, crown cork, lug caps, plastic film laminates, craft paper, paper board and packaging machinery, while the imports include tinplate, coating and lining compounds and others. In India, the fastest growing packaging segments are laminates and flexible packaging, especially PET and woven sacks.

Over the last few years Packaging Industry is an important sector driving technology and innovation growth in the country and adding value to the various manufacturing sectors including agriculture and FMCG segments. The growth is also driven by factors like growing pharmaceutical, food processing, manufacturing industry, FMCG, healthcare sector and ancillary in the emerging economies like China, India, Brazil, Russia and few other East European countries.

Indian domestic packaging industry will see notable growth over 2016-2021, growing at a CAGR of 9.2% as compared to 6.2% during 2011-2016. The growth will be heavily influenced by changing demographics such as growing urbanization and the rising proportion of middle class consumers. These changes drive the need for new packaging formats, such as different sizes, materials, and strength.

During the period 2016-2021, the Soft Drinks and Food industries will be the highest packaging market share gainers (by units) with share growth of 3.4% and 1.3% respectively. The growing organized retail sector has been a significant driver of the growth of the Food & Beverage industries, which in turn drives the growth of Indian packaging industry. In addition, innovations in the packaging industry, such as the development of lighter packaging with better barrier properties, add to the growth of packaging industry. In terms of packaging material, Glass and Rigid Plastics will be among the major share gainers, with share growth of 0.7% and 0.6% respectively during 2016-2021.

Flexible Packaging is the leading pack type in the Indian packaging industry and will grow at a healthy CAGR of 8.9% during 2016-2021, with major contributions from the Food, Household Care, and Cosmetics & Toiletries industries. This growth is largely driven by its low cost and flexibility to suit multiple shapes and sizes, convenience (zip-locks, plastic closures), and low-carbon foot print on the environment as compared to Rigid Plastics. In addition, the increasing prominence of low-density flexible packs in high protein foods is expected to drive the growth in the future.

With advancement in technology and general awareness, the packaging sector in India is well poised as most of the raw materials for packaging are abundantly available in the country. Moreover, the per capita spending has increased tremendously, leading to changing rural markets and a growing middle class who demand the best of products. Various upgraded technologies are being used in industry such as aseptic packaging, retort packaging and biodegradable packaging to enhance the life of food product. Moreover, the plastic packaging market is expanding rapidly registering a growth of 20-25 per cent per annum and is valued at 6.8 million tons while the paper packaging industry stands at 7.6 million tons. The packaging industry is poised to grow rapidly led by the increasing use of innovative packaging equipment and the rising flexible packaging market.

2. STRATEGY AND OUTLOOK

RT Packaging Limited is one of the largest integrated packaging companies in India. It is a leader and preferred supplier of paperboard and flexible laminate based packaging solutions. With its state-of-the-art infrastructure in Haryana and Karnataka, RT is catering to a wide spectrum of packaging requirements for the last three decades. It offers innovative and efficient product ranges across the major segments of packaging from printed lined cartons, laminates to packaging machines.

RT has a unique selling proposition for its customers whereby RT is able to offer and supply different packaging solutions from a fully integrated manufacturing facility covering paperboard based mono or lined cartons or flexible preformed laminate packs, pouches, laminate rolls and gravure labels. The state-of-the-art manufacturing facility is temperature & humidity controlled and dust free, which results in highest standards of hygiene & quality control. Due to increasing expertise in the packaging of Food and Beverages, Spices, Personal Care products, mono and lined cartons and flexible laminate packaging segment is expected to capture the packaging demand. The overall packaging industry in India has a huge growth potential and is expected to reach 4.81 Trillion in FY2020-21. Additionally, India is growing as a manufacturing hub and the exports are also growing. To cater to the international market, the packaging standards are being uplifted which calls for adopting better packaging methods, materials and machineries to make sure that the quality of end product and visual appeal is top notch. Moreover highly favorable demographic patters in India such as increasing working age population, growing disposable income, growth in middle class, ongoing urbanization and changing lifestyles etc., will further drive the growth of packaging industry in India.

3. OPPORTUNITIES & STRENGTHS

The growth of packaging industry in India will be majorly impacted by the performance of the End-Use Industries, growing Consumerism and government initiatives. RT Packaging Limited is suitably positioned to take advantage of the growth that is expected in the End-Use Industries and growing Consumerism in the country. This is due to low utilization of the installed capacities that presents an opportunity to capitalize on the growth in the packaging business.

End-Use Industries:

The Indian Food & Beverage industry has nearly 25% yearly growth and there is a major application of paperboard cartons and flexible packaging in food products and beverages. Thus growth in food and beverage sector highlights the growth potential for cartons and laminates in packaging. In this Industry segment, RT is a major supplier to Pepsi, Hindustan Unilever, Perfetti, Nestle, Amul, Mother Dairy, etc. to name a few.

Similarly, personal care sector, which is growing at nearly 15%, will also drive demand for flexible laminates and cartons, as it is the most used material for packaging of small size packs, whether it is shampoos, pickles, spices, etc.

Consumerism: Growing consumerism will also contribute to growing demand. Consumers preference for the use of convenient packaging and affordable packaging is driving the market towards flexible packaging in India. Consumers today are increasingly looking to buy products which are suitable for handling, long lasting and easy to store and as plastics can be used with great versatility, they have been the preferred choice in packaging. This growth will also be pushed by the increasing size of middle class population in tier II/III cities in the country.

The Governments "Make in India" campaign which aims to turn the country into a global manufacturing hub will have positive impact on the growth of packaging industry. The proposed policies of government for technology upgradation fund scheme, setting up of plastic parks, setting up Special Economic Zones (SEZs) to overcome bottlenecks of infrastructure and creating business friendly policies will help in exploring the underlying potential. Also the extended support from Ministry of Chemicals & Fertilizers and the Central Institute of Plastics Engineering &Technology (CIPET) will drive the growth of packaging industry in India.

Socio-economic Factors: The demand for packaging is expected to grow primarily on account of rising personal disposable incomes and evolving tastes and preferences of the consumer. The change in aspirations for better quality consumer products has resulted in higher industry growth rates Convenient and Eco-friendly Packaging: Amidst growing global environmental concerns and the need to control pollution levels, the demand for sustainable and eco-friendly packaging has increased. One of the main beneficiaries of this trend is the ‘convenience packaging industry. Consumers are increasingly looking for products which are easy to open, consume, store, carry, and dispose of, which has led to an increase in the demand for flexible packaging. The Boom in E-commerce Industry: Over the last couple of years, the online shopping industry has experienced significant growth. Consumers, attracted by discounts and the convenience of shopping from home, have started to order not just white goods but also everyday items online. This has led to an increase in demand for packaging, especially corrugated cartons which the Company manufactures in large numbers. The Company also has substantial capacity to manufacture lined cartons.

FMCG Sector: India ranks among one of the top producers of food, vegetables and fruits. The introduction of FDI in the retail sector is expected to continue to provide significant growth opportunities to the Indian retail market. Growth in consumer spend, growing rural demand, changing demographics, emergence of a fast growing market for convenience goods, retail trade and quest for quality products is expected to result in increased demand for packaging in the medium to long term.

Low Rural Penetration: The current demand for packaged products is still primarily driven by the urban population. The rural population is gradually appreciating the importance of packaged products in terms of hygiene and quality (particularly food items) due to increased social awareness in these areas. As a result, many FMCG companies have started to launch smaller and lower sized versions of their products for the rural areas. This has offered a new avenue of growth for the packaging industry.

The ‘Make in India Campaign: The ‘Make in India campaign launched by the current Government is expected to give a major impetus to the manufacturing industry which is likely to boost the demand for packaging in India. Established Track Record: Rollatainers is one of the pioneers of the Indian packaging industry with strong brand equity. With over 40 years of track record of success, the Company is highly regarded amongst both its customers and peers. It is also one of the few publicly listed companies in the packaging industry.

Diversified Products: Rollatainers is one of the very few packaging companies present in paper board based packaging, flexible packaging and also packaging machinery. This makes it a one stop shop for the FMCG industry and other users of packaging. This also allows the Company to provide integrated and customized packaging solutions.

Reputed Customer Base: Rollatainers caters to the packaging needs of leading FMCG companies such as Amul, Britannia, Conagra Foods, Hindustan Unilever, Nestle, Patanjali, Pepsi, Perfetti and Tata Global Beverages amongst others. These customers have been long standing business partners over the years.

Focus on Innovation: Rollatainers has a strong track record of new product development. The ability to integrate materials and machines is a strength which enables the Company to deliver new and innovative products which are customized to users requirements. Over the years, Rollatainers has won reward and recognition for its focus on innovation.

Experienced Management Team: The core strength of the Company is a strong and experienced senior management team. The management has a successful track record of delivering quality products with a focus on innovation. Certifications: The Company renewed its prestigious certifications such as FSC COC so as to continue the focus on sustainability and environment protection. The SEDEX certification is a symbol of our reliance on ethics in business and the BRC IOP certification relates to food safety for international markets including Europe. These certifications have not only helped to secure orders from large multinationals but also reinforce our commitment to excellence.

4. THREATS AND CONCERNS

As the key products of RT Packaging are composite materials, involving use of low density polyethylene, polyester, metallized polyethylene, paper, paperboard and Aluminium foil, they are not biodegradable. With increasing awareness on environmental issues, any decision by Government restricting use of such composites is a key risk to our business. However, the sourcing strategy of RT has been very much conscious of the environments effects, which is why the company has been sourcing its paper and paperboard materials from certified sustainable sources. The company is also continuously working on developing new flexible packaging solutions which are more sustainable and cause least environmental impacts.

Fragmented Structure: One of the key features of the industry which hinders growth is its highly fragmented nature. The many vendors operating in the market compete aggressively on price with the objective of increasing their market share Lack of Negotiating Power: A limited raw material supplier base often weakens negotiating power especially for companies that lack scale.

Unorganised Sector: Although efforts are being undertaken by the Indian Government and industry associations to bring the unorganised sector under the purview of the regulated industry, it still constitutes a significant portion of the total revenues of the industry. However, it is expected that the growing awareness of the importance of hygiene and health considerations will support the growth of the organised sector. The Company has undertaken various initiatives such as working towards greater efficiency, better quality, and product innovation to mitigate this risk. Regulatory Changes: The industry is vulnerable to such changes in laws relating to environment, waste disposal and food & product safety. These changes can lead to an increase in costs, loss of markets, discontinuation of product lines and a need to invest more in technology.

In the recent past, some announcements have been made for voluntarily stopping of single use plastics, eventhough, no regulatory changes have yet been made. These announcements are, however, expected to be followed by regulatory changes sooner than later. This will have an adverse impact on some of the products currently manufactured by the company. To counter this impact, the company is already in advanced stages of developing fully biodegradable versions of such products. However, that would make such products marginally costlier in the short term.

FOOD & BEVERAGE INDUSTRY

The Food and Beverage (F&B) segment, globally and in India, has undergone a transformation, moving away from a "sub-segment of retail" to a" full-fledged segment" capable of functioning independently of traditional retail. The change in our F&B landscape has been due to structural shifts in the eating out equation - increasing urbanization, rising disposable incomes, rising trend of socializing, nuclear families, and rising consumerism; all of which have orchestrated a change in the way India dines.

Food and Beverages services continues to remains one of the key segments of the Indian economy contributing to employment generation, skill development, growth in the allied industries, entrepreneurship and creating experiences. The total Indian F&B service market (organised and unorganised) is estimated at 4,23,865 crore in 2018-19 and projected to grow at compounded annual growth rate (CAGR) of 9% per annum and is expected to reach ‘ 5,99,782 crore by 2022-23. The organised segment with market share of 35% is estimated at ‘ 1,48,353 crore in 2018-19 and is projected to grow at a CAGR of 15% to reach ‘ 2,57,907 crore by 2022-33. (Source: NRAI India Food Services Report 2019) India has one of the highest millennial population aged between 18 to 35 years, which happens to be tech-savvy, independent, career driven individuals with global exposure possessing higher spending capacity. Today, almost one-third of the population is below 25 years and almost half of the population is below 35 years. While this means that consumer demand will keep growing in the future, thereby propelling Indias GDP via internal consumption, it also means that the types of products, services and experiences will undergo a big change to keep pace with the outlook of this young population.

The restaurant sector continues to contribute highest to manpower requirement in the hospitality sector and also provides impetus to other sectors as well, such as agriculture, food processing, supply chain and logistics, consulting, digital technology, specialised commercial kitchen equipments and real estate.

The food services sector continues to attract interest from domestic as well as international investors as the sector is a domestic consumption driven with high growth potential.

The Indian food services market continues to evolve from home grown, standalone, family run business ventures into chain of restaurants, international partnerships with multipolar and integrated business model. International chains of restaurants have already entered into Indian market. The 35% share of organised sector in the Indian food service industry is steadily rising.

As the F&B landscape matures, it has given enough opportunity for the emergence of home grown chains. With the availability of funding and PE investments in the F&B business, operators have expanded their brands across cities. NCR and Mumbai are the cities that witness the most "cross expansion", with chains headquartered in either of the two cities expanding to the other city fairly quickly.

With the F&B segment gaining so much significance in recent times, the real estate sector has also responded to be in line with its requirements. More space allocated for F&B in malls, the emergence of dedicated F&B clusters, food festivals in malls, F&B pop ups, increased allocations in commercial buildings are some of the key trends that have been noticed off late.

On the other hand, operators need to be innovative in not only their cuisine but also their operation format, invest in increasing visibility with satellite units and pop up units, establish local connect with their catchment, tap segments of the F&B chain that are untapped but offer growth potential and use technology to enhance customer experience and improve efficiencies.

The market segment of the organised food service industry is dominated by Casual Dining Restaurants with 55% market share followed by Quick Service Restaurants at 20% and Pub, Club & Bar at 12%, while Cafe chains at 7%, Full Service Restaurants (Premium Casual Dining Restaurants and Fine Dining Restaurants) at 2% and Others (Frozen desserts and ice-creams etc.) at 3% forms the rest

Indian foodservice market segmentation, October 2018

Category 2017 %
Casual Dining 581 55%
Quick service restaurant and fast food 215 20%
Pub, club and bar 127 12%
Caf 77 7%
Full service restaurant 24 2%
Others 31 3%
Total 1055 100%

Industry

Over past few years, increase in the number of independent coffee shops / cafs in India can be attributed to changing consumer lifestyles, expanding working population base and growing influence of western culture. Moreover, these cafes offer customized local Indian menus to address the demands of the local population. Few of the leading chained coffee shops operating in the country include Caf Coffee Day, Barista Coffee, Costa Coffee and Tata Starbucks, among others. These players are anticipated to maintain their dominance in India coffee shops / cafs market through 2021, on account of their expansion plans coupled with continuous efforts towards localizing their product offerings.

According to TechSci Research report, "India Coffee Shops / Cafs Market Forecast, Consumer Survey and Opportunities, 2021", coffee shops / cafs market in India is projected to grow at a CAGR of over 11% during 2016-2021, on account of the growing coffee culture among young population, increasing urbanization, rising disposable income levels and changing eating and drinking preferences of consumers. Changing work patterns of business executives is also driving demand for such coffee shops / cafs, as these outlets offer services such as free WiFi, entertainment zones, etc.

"In India, coffee shops / cafs market is in developing stage, with majority of demand for coffee beverages emanating from urban centres such as New Delhi, Mumbai, Bengaluru, Chennai, Hyderabad and Kolkata. In addition to metros and Tier I cities, new companies and leading market players are targeting expansion to Tier II and Tier III cities. This coupled with implementation of various government plans to develop smart cities, etc., is projected to drive growth in India market for coffee shops / cafs over next five years.", said Mr. Karan Chechi, Research Director with TechSci Research, a research based global management consulting firm.

Store economics

Average per Cover INR 350-400
Average Store Size (Sq Foot) 800-1,200
Average Capex per Store (INR Lacs) 40-50
Average Sales per day per Caf INR 25,000-30,000

What have we done in the last year

Over the last year Barista has gained mileage by rapid expansion of stores, close to 52 plus stores were opened last year across various formats. Three Diner and Eleven Barista Express format stores already operational as on date, these concepts were launched in 2018. Food & beverage innovation has been a cornerstone to our success, launch of cold brew & Quenchers Season 2 has helped us gain lot of mileage over competition.

Growth target and focus areas

The Company plans to grow to over 500 outlets in next five years. The brands focus will be on expanding in international geographies which are more mature markets and have better price realisations and opening outlets at strategic locations such as Airports, Hospitals, Institutions & domestic market.

Kylin

Launch, history, description and USP

Kylin brand has a major presence in North India, primarily in the Delhi/NCR region and is popular among people of all age groups. Kylins cuisine includes Japanese, Thai, Burmese and Chinese. The chain aims at providing new and innovative flavours for the Indian palate. The total number of Kylin restaurants stands at 16.

What have we done in the last year

Focus was on enhancing menu offerings and providing consistent food products, with set up pf high end Central kitchen which helped standardize the culinary experience. Further, it had also helped standardize food across outlets be it Company Operated and Franchise Operated stores.

Growth plan and focus areas

With set up of backend infrastructure on food, Kylin plan to increase its footprints in and outside North India. Plan is to grow the chain to 35-40 outlets in next 1-2 years.

OPPORTUNITIES & STRENGTHS

Large share of young population: With a population of 1.3 billion, India is one of the largest consumer markets globally. Demographically, it is also one of the youngest markets with more than 45 per cent of population below the age of 25 years. The country has the youngest median age (27.6 years) currently, among the BRICS nations and major global economies. With an estimated median age of 29.7 years in 2030, it would continue to be the leader in that domain Increasing disposable income: The growing Indian economy has resulted in rising income levels, thus leading to an increase in disposable income. The countrys household income and consumer spending are also expected to increase over the next five years, driving the food service industry and presenting a lucrative opportunity to the companies operating in the segment.

Changing consumer Lifestyle: A rapidly growing young population, rising income levels, increasing use of technology in consumer space, urbanisation, brand and style awareness, health consciousness, increased social media activity, hectic life routines, etc., have led to a shift in consumers food buying habits. The following trends are pushing the food service industry towards a high growth trajectory.

The Eating-out Experience: Consumers preference for eating out is largely driven by their desire for a different experience in terms of service, ambience and food. Moreover, todays consumer is inclined to explore eating-out options more frequently than ever before. This trend has been supported by increasing affordability and easier accessibility particularly to shopping malls.

Media Proliferation and Enhanced Awareness: The growing coverage of F&B by the media, especially by social media and the emergence of food based celebrity shows, has rapidly promoted awareness and interest amongst consumers. Increasing international travel has also led to various consumer groups becoming progressively more exposed to different cuisines and culinary styles.

Evolution of Food Retail Concepts: The emergence of food courts at malls, F&B hubs, food options at transport hubs such as airports, railway stations and highways is also driving the growth of the organized F&B sector. Technology: The increasing use of smartphones and mobile technology has allowed for convenient and instantaneous access of customer reviews and evaluation of restaurant menus, leading to more frequent eating out. The rise in the numbers of online delivery businesses has made it easy to target the delivery business.

THREATS AND CONCERNS

Changing tax dynamics: With the change in the tax environment during fiscal year 2018 on account of withdrawal of input credit, industry has been impacted at a large level as the P&Ls continue to be sensitive to these changes. Competing with the Unorganized Sector: The unorganised sector continues to be a large part of the F&B industry. Low overheads and the absence of regulatory accountability enable low operating costs and hence flexibility to compete aggressively on price. However, there is limited overlap between the target customer groups of the organised and the unorganised F&B segments.

Real Estate Cost and Availability: Suitable real estate at affordable prices is one of the biggest challenges facing the organised F&B industry. The potential combination of low average daily sales and high property rentals result in significant financial pressure.

Infrastructure and Supply Chain: Scalability can be challenging due to the lack of adequate infrastructure across many parts of the country. The unavailability of certain ingredients within India restricts the width and depth of the menu and price offerings. The limited availability of adequate cold storage infrastructure also hampers the growth of the food service industry where restaurants rely on the cold supply chain. With currently limited food processing capabilities, many processed ingredients are either imported or made in-house.

Regulatory Aspects: With a large number of licenses required and the time taken for obtaining these, the restaurant industry always has a long lead time for opening new outlets. In addition to the time taken, the cost of compliance is also relatively high. There is currently no central or single window for obtaining all statutory licenses required to operate an outlet. In addition, state governments have different license requirements thus increasing the complexity for a restaurant chain to plan timelines.

Staff Retention: Restaurants often experience high staff attrition, largely attributed to the scarce availability of skilled manpower and competitor dynamics. High staff turnover rates result in increased training and retention costs for restaurants.

Corporate Overheads: Achieving operating restaurant scale is essential in covering corporate overheads and other central costs in the organised F&B sector. Without this scale, overall corporate profitability may be challenged. Cloud Kitchens :Cloud kitchens, restaurants which deliver food directly from the kitchens, have recently been able to attract consumer interest. However, they have still not been able to meaningfully build market share with the type of consumer seeking a complete F&B experience

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an internal control system which monitors the compliance of internal processes. It ensures that all transactions are authorised, recorded and reported correctly. The systems are routinely tested and certified by Statutory as well as Internal Auditors and cover all offices, plant facilities and key areas of business. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms.

The Companys internal control systems provide for:

• Adherence to applicable accounting standards and policies

• Accurate recording of transactions with internal checks, prompt reporting and timely action

• Compliance with applicable statues, policies, listing requirements and management policies and procedures

• Review of capital investments and long term business plans

• Periodic review meetings to guide optimum utilization of resources

• Effective use of resources and safeguarding of assets

The Audit Committee reviews the effectiveness of internal control systems, and also provides timely updates on operating effectiveness and controls to senior management team. A Whole Time Director and CFO Certificate, forming part of the Corporate Governance Report, reinforce the effectiveness of internal controls and reiterates their responsibilities to report any irregularities to the Audit Committee and rectify any issues.

The auditors carry out periodic audits as per an agreed internal audit programme. They bring to the notice of management issues which require their attention and also highlight the severity of the issue. Corrective actions are then rapidly set in place. The internal auditors report is reviewed by the Audit Committee and placed before the Board of Directors for their consideration.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Standalone

During the period under review, based on Standalone financial statements, the Company earned Total revenue amounting to Rs. 75.00 Lakhs as compared to Rs. 1744.87 Lakhs in the previous year. Loss after Tax stood at Rs. 7981.00 Lakhs as against Loss after Tax of Rs. 102.20 Lakhs in the previous year.

Consolidated

During the period under review, the Companys consolidated revenue for the year ended 31.03.2019 was Rs. 13852.00 Lakhs compared to Rs. 14460.75 Lakhs for the period ended 31.03.2018.

The Consolidated Net Loss for the year ended 31.03.2019 was Rs. 2382.00 Lakhs compared to loss of Rs. 44.43 Lakhs for the period ended 31.03.2018.

The Consolidated Total Comprehensive loss for the year ended 31.03.2019 was Rs. 2374.00 Lakhs.

FINANCIAL CONDITION

Rollatainers monitors its financial position regularly and deploys a robust cash management system. The Company has also been able to manage adequate liquidity to meet its business requirements.

DEBT POSITION

There is no secured debt in the Company.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

During the year, the Companys successes were made possible by the relentless efforts of each and every employee. The Company has developed a robust and diverse talent pipeline which enhances Rollatainers organizational capabilities and further driving greater employee engagement. Our human resource program is focused on attracting the right talented individuals, providing excellent on the job training opportunities, and finally giving them the growth opportunities consistent with their aspirations.

In addition, the trust our employees place in us is evident in our ability to retain key employees and senior executives during FY2019. Rollatainers has always enjoyed strong industrial relations. The company has a systematic grievance redressal system to further strengthen these relationships.

This system encourages employees to share their views and opinion with the management. The Company reflects on this feedback and incorporates relevant changes into the existing policies, systems and processes. During the period under review, the Company maintained a cordial relationship with its workforce. The Directors would like to place on record their appreciation and recognition towards all its employees who continue to exude confidence and commitment toward the Company.

STATUTORY COMPLIANCE

The company secretary, as compliance officer, ensures compliances of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"). Compliance certificates are obtained from various departments of the Company and the Board is informed of the same at every Board Meeting.

CAUTION STATEMENT

The above mentioned statements are only ‘forward looking statements based on certain assumptions and expectations. The Companys actual performance could differ materially from those expressed/projected depending upon changes in various factors. The Company does not assume any responsibility to any change(s) in forward looking statements, on the basis of subsequent developments, information or events etc.

Important developments that could affect the Companys operations include a downward trend in the domestic automotive industry, competition, rise in input costs, exchange rate fluctuations, and significant changes in the political and economic environment in India.