Shetron Ltd Management Discussions.

Your Directors have pleasure in presenting the Management Discussion and Analysis Report for the year ended on

March 31, 2020.



Global growth is projected to rise from an estimated 2.9 percent in 2019 to 3.3 percent in 2020 and 3.4 percent for 2021 The global expansion has weakened. For the emerging market and developing economy group, growth is expected to increase to 4.4 percent in 2020 and 4.6 percent in 2021. The global food & beverage metal cans market is estimated to be valued at USD 27.6 billion in 2020 and is projected to reach USD 37.0 billion by 2025, recording a CAGR of 6.1%. The high recyclable rates of aluminum and Steel and the rising number of health-conscious consumers and increasing awareness about healthy nutrients in food & beverages have led to the demand for metal cans. The rise in awareness regarding the drawbacks of using single-use plastics and government intervention in banning the use of such plastics that affect the environment adversely has significantly driven the growth of the metal packaging market for food & beverages. The rapid increases in battery technology are gaining demand mostly from consumer electronics. The growing production including import and export of batteries worldwide offered opportunities worth $115.62 billion in 2018, and the global battery market will prosper at a compound annual growth rate of 8.21% during the forecast period of 2019-2025. On the contrary, due to COVID-19 has triggered the deepest global recession in decades. While the ultimate outcome is still uncertain, the pandemic will result in contractions across the vast majority of emerging market and developing economies. COVID-19 has delivered an enormous global shock, leading to steep recessions in many countries. The baseline forecast envisions a 5.2 percent contraction in global GDP in 2020-the deepest global recession in decades. GDP in the South Asia region is projected to contract by 2.7% in 2020 as pandemic mitigation measures hinder consumption and services activity and uncertainty about the course of the pandemic chills private investment. In India, growth is estimated to have slowed to 4.2% in FY 2019/20, which ended in March 2020. Output is projected to contract by 3.2% in FY 2020/21, when the impact of the pandemic will largely hit.


Indias GDP growth is seen dipping to an 11-year low of 5 per cent in the current fiscal and is forecast to slow down to 4.8 per cent for the current fiscal 2020-21, mainly due to poor showing by manufacturing and construction sectors. The estimated growth of real GVA (Gross Value Added) in 2019-20 is 4.9 per cent as against 6.6 per cent in 2018-19.

The manufacturing sector output growth will decelerate to 2 per cent in 2019-20, down from 6.9 per cent in the

previous financial year.

As the COVID-19 pandemic is still evolving rapidly and showing no signs of abating as of March 31, 2020, its negative impacts on economic performance of countries and territories in Asia and the Pacific will likely be very significant.


Manufacturing has emerged as one of the high growth sectors in India. Governments Make in India program to place India on the world map as a manufacturing hub and give global recognition to the Indian economy. Transformation in the packaging industry, starting from simple packaging to creative designs is due to increase in demand for zero waste lifestyle by using plastic-free and eco-friendly alternatives. metal has become even more popular because of its durability and sustainability properties. These qualities have been growth promoting factors for the metal packaging companies. Aluminum and steel metals are the two most important types of metals, which are 100% recyclable and also protect food from contamination. Thus, these advantages offered by metal packaging are creating new opportunities to fend off substitution by other materials. Can type is a viable option in the metal packaging market, as metal cans are unbreakable and provide longevity to products. Steel demand in India, the third largest steel consuming economy, remained strong. India became the second largest steel producer in 2019, registering 111.2 million tonnes (MT) in 2019 of production (World Steel Association, 2019). The monthly consumption of hot-rolled products in India increased by 30.7% compared to the corresponding time period one year earlier. The global metal packaging market size stood at $130 billion in 2018, and is estimated to grow with a CAGR of 2.70% during the forecast period 2019-2025.

Metal is tapping more into beverages through can packaging compared to food. This advanced packaging is worthy of a wide range of acceptance, because it is advantageous in new category beverages such as ready-to-drink (RTD) beverages. The application of metal packaging in the beverages industry is expanding at a CAGR of 3.4% through to 2025.

The market size of the Indias packaging industry is expected to touch USD 72.6 billion by FY20 on account of rising population and income levels, according to a study by Assocham-EY. The industry was USD 31.7 billion in 2015. The growth is driven by key factors such as rising population, increase in income levels and changing lifestyles. The market of dry cell batteries in India is becoming promising day by day and has grown with a CAGR of above 4% historically. Lack of proper power facilities generates higher demand for these batteries in the rural segment of the country and due to the increasing use of portable equipment in the urban. The higher demand in the rural segment is a higher revenue generator for the dry cell market. Innovative improvements such as compact, long-lasting, disposable are relied upon to give a thriving force to the dry cell battery in the Indian market. The increasing availability and adaption of compact equipment that run on powerful dry cell batteries are driving the year on year growth of dry cell market. The business sectors also play a part in guiding the market with a strategy of providing dry cells with dedicated products like toys, remotes, clocks etc. The dominance of organized players in the market has been viewed as a driving force that has allowed the market to grow at the GAGR of above 5% till 2018-19. A constantly expanding distribution network to meet the ever-increasing demand, the dry cell batteries are available in all kinds of local stores, malls, and available online too. The strategic product display and attractive packing makes this a low involvement purchase.


The Indian packaging industry, with a turnover of USD 24.6 billion and a growth rate of 13% to 15% annually, is expected to reach USD 32 billion by 2020. Packaging has an annual global turnover of about USD 550 billion, and Indias share is about USD 16.5 billion per annum.

The growth of the Indian packaging industry is 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. The Rigid Metal packaging is growing at the highest CAGR of 11.5%, driven by the rise in packaged and canned food sales, aerosol products, and the popularity of metal cans within the beer, cider, and carbonated drinks industries.

The competition from paper and plastic packaging poses a challenge to the metal packaging market.

Increased investments in canned packaging R&D have further propelled the growth of the market. Innovations, such as reduced surface area without affecting the volume, have resulted in lowering the cost of packaging of metal cans, thus, supporting companies in lowering packaging expenses. Consumer trends, such as smaller size consumption and multi-pack consumption, are also supporting the volume growth of the cans in the US and European regions, while similar trends have been observed in the Asia-Pacific region. The growing demand for mini-cans is expected to influence the growth of the market. Due to growing environmental awareness, consumers are demanding metal cans as they have a lower environmental impact. High recyclability of metal is one of the key drivers of the market. The economic conditions and lower pricing of canned goods in some regions remains a key driver in the market.


Consumer habits, new technology and machinery changes provide exciting opportunities, along with some challenges, for the packaging market. While the overall outlook is for a robust growth, your company has been identifying challenges facing the metal packaging industry like of the growing use of HDPE (high density polyethylene) and PET bottles. For positive growth, metal packaging companies will need to keep developing new and innovative metal packaging prototypes, and continue to develop new marketing strategies, in order to broaden their share of the market. Our commitment is to offer quality products to our clients and meet their expectations; we continuously strive to bring together segments of all knowledge of new products created by new innovative technologies. The packaging machine industry faces a unique set of challenges that stretches its engineering capabilities to the limits. Consumer goods producers are striving to evolve containers into new shapes to appeal to continually changing customer needs and tastes. Nearly every machine produced by a packaging machinery company is a one-of-a-kind creation designed to bring a package designers creation to life, to increase production rates, or to lower costs As evident, the industry is facing various challenges such as rapid changes in technology, shortage and rising cost of raw material, high levels of inflation, rising input costs, highly- inadequate credit flow, lack of market access, lack of exposure to best management and manufacturing practices, marketing, distribution and branding, and 100 per cent commitment to the quality standards.


The Company products constitute metal packaging and hence there is no separate disclosure on segment reporting.


The company has a proper and adequate system of internal controls to ensure that all assets are safeguarded, and protected against loss from unauthorized use or disposition. Various Checks and balances ensure that transactions are authorised, recorded, and reported correctly. The Company has an extensive system of internal controls which ensures optimal utilization and protection of resources, accurate reporting of financial transactions and compliance with applicable laws and regulations and internal policies and procedures.

The internal control system is regularly reviewed by the Audit Committee and has well documented policies and

guidelines to ensure reliability of financial and all other records to prepare financial statements and other data.



The Company maintains a cordial relationship with its employees by creating a positive work environment, with focus on improving productivity and efficiency. The Company has a team of qualified and dedicated personnel contributing to the better performance of the operations and processes of the company. Constant training continues to be the focus for developing and honing the skill sets and competency levels of employees in the organization in line with the business standards and requirement. The company firmly believes that well trained man power at every level provides the true competitive advantage in its business and hence the Company invests resources in training. The companys endeavor is to offer fair and reasonable compensation to its employees based on the market benchmarks.


Your Company has completed the fifteenth year of TPM (Total Productive Maintenance) programme to sensitize employees in safe and clean working environment enabling, zero accidents and breakdowns, highly skilled teams with high OEE rates and customer not clear through good quality, less cost and timely delivery.

Your Company is ISO 9001:2015 certified for Quality Management Systems (QMS). The ISO version is upgraded from ISO 9001:2008 to ISO 9001:2015 by stringent audits from TUV-Rheinland. Through this your company is committed to be competitive and efficient ensuring to achieve customer satisfaction with Continual process improvements. Your company is making continuous efforts for improvement in the processes, Quality Management Systems (QMS) and skill building. In addition to Quality Management Systems, your Company is also ISO 22000:2005 certified for Food Safety Management Systems (FSMS) which was received in the financial year Mar-2018. This will help in maintaining and monitoring of Hazard and Critical Control Points (HACCP) during the process of manufacturing metal cans for food packaging. The certification helps to set standards for hygiene of employees and the surroundings which will impact in hygienic packaging for processed food. As the companys policy of FSMS speaks, it prevents contamination in source and ensures product safety, while also complying with the applicable statutory and regulatory requirements.


Statements in this report describing the companys objectives, expectations or forecasting may be forward looking within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed in this statement. Important factors that could make a difference to the companys operations include economic conditions affecting demand/supply and price conditions in the domestic and also international markets, changes in the Government regulations, tax laws, other statutes and also many exogenous variables . The Company assumes no responsibility to publicly amend, modify and revise any forward looking statements, on the basis of any subsequent development, information or events or otherwise.

SIGNIFICANT CHANGES IN KEY RATIOS : In Accordance with SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 Amendment regulations 2018, The Company is required to give details of significant Changes (change of 25% or more as compared to the immediately previous financial year) in key financial ratios).

S.No. Particulars 2019-20 2018-19
1 Debtor Turnover Ratio 5.65 5.65
2 Inventory Turnover 3.78 3.54
3 Interest Coverage Ratio 1.53 1.69
4 Current Ratio 1.39 1.40
5 Debt Equity Ratio 1.54 1.86
6 Operating Profit Margin(%) 11.37 12.41
7 Net Profit Margin(%) 0.41 1.20
For and on behalf of the Board
Place : Bengaluru For Shetron Limited
Date : 24 June 2020
Divakar S Shetty
Executive Chairman
DIN: 00432755
[Address: Divya Bunglow, Dr. R.S. Jain Marg,
Gandhigram Road, Juhu, Mumbai 400049]