Yashraj Containeurs Ltd Management Discussions

YASHRAJ CONTAINEURS LTD. (YCL) firmly believes that good Corporate Governance results in regulation of the affairs of your Company in a most transparent, ethical and accountable manner.

Adherence to Corporate Governance ensures greater level of transparency and accountability, fairness in operations, full disclosure, integrity and compliance of laws. Your Company is committed to administer good Corporate Governance.

INDIAN ECONOMY

Indian economy recovered quickly from the Pandemic and further growth is expected to be supported by solid domestic demand and in capital investment. The Internationa] Monitory Fund and RBI estimate real GDP growth of 6.8% in 2022-2023 & 6.1 % in 202324. The lower growth in 2023 is due to the rising Central Bank rates to combat inflation and the war that took place in Ukraine.

The Indian Economy too encountered head winds during the year, following the sharp rebound in domestic economic activity during the previous F.Y 2022-2023, was a year of normalization with demand in many sectors gradually moderated yet remaining robust.

The market is expected to continue growing as farmers adopt modern farming practices and seek solutions to protect their crops from various threats.

The Indian Economy remains optimists in terms of Growth opportunities.

INTERNAL CONTROL SYSTEMS

The Company has got internal control system commensurate to the size and the systems and operations. It is supplemented by extensive internal audit procedures, reviewed by Management and Audit Committee. The internal audit covers all the activities of the company. Company reviews findings of internal audit system on regular basis and they are upgraded based on internal audit recommendations.

Your companys statutory Auditors have confirmed the adequacy of internal control systems.

THE BUSINESS

The purpose of handling is to respond to any problems that might impair worker safety during all times. However, the Barrels & Drums i.e. manufacturing process, it is likely that accidents may occur during handling the drums and other hazardous waste containers. Hazards include detonations, fires explosion, vapour generation and physical injury resulting from moving heavy containers by hand and working around stacked drums, heavy equipment and deteriorated drums. While these hazards are always present, proper work practices such as minimizing handlingand using equipmentand procedures and your company takes every effort

so to minimize the accidents.

POSSIBLE CHALLENGES DUE TO PANDEMIC

We have experienced a serious market arrest due to Pandemic in the previous years. All the inter border trades were stopped to mitigate the life risk affecting the entire industry thereon. The rise in Omicron variant - leading to re-imposing of pandemic precaution - is an example of the same. Such threats are likely to impact the industry drastically once again.

The Barrel Industry continue to witness a downward trend on account of Demonetization. Indias Regulatory Environment is undergoing several structural changes with the Indian Regulation being modified to reflect the development in the Western world eg. GST the most ambitious tax reform since Independence was introduced w.e.f. July, 2017 onwards.

The Company has followed all legal and Regulatory Compliances requirement and has implemented all statutory requirements.

INDUSTRY SCENARIO & REGULATORY

Indian economy recovered quickly from the Pandemic and further growth is expected to be supported by solid domestic demand and increase in capital investment. The services Sector saw quick recovery in Financial Year 2022-2023 growing 8.4% year to year and continued to grow in Financial Year 2023-2024.

The Capital Expenditure from Financial Year 2022-2023, stands at 2.9% of GDP, indicating the Governments commitment to investing in the countiy growth. Moreover the Government of India has announced an even larger allocation of Rs.10 lacs, crores for next fiscal year which demonstrates their long-term vision for the economy.

THREATS & OPPORTUNITIES

Yashraj Containeurs Ltd. has appropriate Risk Management systems in places for verification and assisting of Risks Measures to mitigate the mechanisms for their proper and timely monitoring and reporting. The Board also regularly reviews risks.

The major opportunities lie in:

i) increase of product range.

ii) benefit from the most preferred supplier status from most of the large Steel drum buyers in India and neighbouring countries.

iii) moving up in value chain from customers.

iv) Consolidation in the Industry.

v) Entry to the new market where our Company does not have substantial presence.

The major threats being faced by our Company are:

i. The presence of excess manufacturing capacity in the industry leading to depressed pricing/margins.

ii. Tender based supplies with water thin margins.

iii. Competition from alternative packing products like ISO Tankers, Flexs Tanks etc.

iv. Volatility in the Steel Industry leading to unstable pricing.

v. Escalation of inputs costs are not reimbursed by the customers due to competitive Pressures.

vi. The GOI has introduced several reforms to liberalise, regulate and enhance the Industry. The Government and Reserve Bank of India have taken various measures to facilitate easy access to finalize for micro small and medium Enterprise (MSMEs).

These measures include launching credit Guarantee Fund Scheme for MSMEs, issuing guidelines to bank re: collateral requirement and setting up a micro units Development and Refinance Agency (MUDRA). Thus India is undoubtedly one of the world most vibrant capital market. Further RBI has announced Rs.3.74 lac. Crore of liquidity package for Indian banking system to support Financial market hit by Covid-19.

The Company addresses these risks through a well-structured framework which identifies desired controls and assigns ownership to monitor and mitigate the risks.

CAUTIONARY FORWARD LOOKING STATEMENT

Certain statement in the Directors Report describing the Companies objectives, projections, estimates, expectations or predicators may be forwarding looking statements within the meaning of applicable securities laws and regulations. Actual results could differ from those expressed or implied. Import factors that could make a difference to the Companies operations include Labour and material availability and prices, cyclical demand and pricing of the companies principal markets, changes in government, regulations, tax, economic development within India and other incidental factors.