Essel Propack Ltd.
|BSE: 500135||Sector: Industrials|
|NSE: ESSELPACK||ISIN Code: INE255A01020|
|BSE LIVE 15:40 | 17 Nov||308.65||
|NSE 15:51 | 17 Nov||310.90||
|Mkt Cap.(Rs cr)||4,854|
|Mkt Cap.(Rs cr)||4853.52|
Essel Propack Ltd. (ESSELPACK) - Director Report
Company director report
Essel Propack Limited
Your Directors are pleased to present their Report on your Company's businessoperations along with the Audited financial statements for the financial year ended on 31March 2017.
Your Company has posted yet another year of good performance both in India and inGlobal operations. The highlights of the financial results are set out below. It may benoted that pursuant to the notification dated February 16 2015 of the Ministry ofCorporate Affairs (MCA) your Company has adopted the Indian Accounting Standards (Ind AS)notified under section 133 of the Companies Act 2013 (the Act) in preparing andpresenting the Financial statements beginning the financial year under report; the figuresfor the previous financial year ended on 31 March 2016 and the balances as on 1 April 2015have been restated accordingly in order to make these comparable.
CONSOLIDATED GLOBAL RESULTS
The summary results are set out below.
(Rs. in lakhs)
The Consolidated Total Income has grown year over year by 8.7%. The previous year'sresults include the revenue and profits for part year of the divested flexible packaging
subsidiary Packaging India Pvt. Ltd. Adjusted for this the total Income for continuingbusiness has grown by 11.4% helped by the acquisition of 100% stake in the German tubingjoint venture effect from 30 September 2016. The revenue growth was impacted by weakersales in India post demonetization in November 2016 continued off take issues at largeoral care customers in China and sales lost in Colombia due to extended ramp up of the newcapacity. Operating cost during the year was impacted by one-off spend relating torationalization of manufacturing sites in India and stabilization of the new manufacturingfacility in Colombia. These together with higher depreciation charge on account of newcapacity addition and the German acquisition have caused 1.2 pp reduction in theOperating margin to 11.8%. Consequently the Profit for the year and exceptional item hasgrown 4.1%. Profit for the year attributable to equity holders has increased by the 11.9%.
INDIA STANDALONE RESULTS
The summary results are set out below.
(Rs. in lakhs)
Your Company's India Standalone Total Income grew by 7.3% during the year impacted byweaker sales following the demonetization in November 2016. Operating cost was impacted bysignificant one off spend incurred in consolidating
the 3 manufacturing sites in the Western India into a new state of art custom-builtfactory in Dhanoli near Vapi. This together with lower than planned revenue growth andhigher depreciation charge caused the operating margin to reduce by 1.6 pp to 11.2%.Consequently the Profit before tax and exceptional items is lower by 4.7% compared to theprevious year. The previous year had the benefit of exceptional gaIn Rs. 4529 lakhs onaccount of divestment of the subsidiary Packaging India Pvt. Ltd. The Net profit aftertax before exceptional items is Rs. 6511 lakhs for the year compared to Rs. 6721 lakhs inthe previous year.
REVIEW OF MARKET BUSINESS AND OPERATIONS
Your Company is a leading manufacturer globally of Laminated Plastic Tubes andLaminates. Its products are extensively used in the packaging of products acrosscategories such as Beauty & Cosmetics Pharma & Health Foods Home and Oral care.The FMCG and Pharma industry which consume the Company's products continue to offersustained growth opportunity for your Company. In the mature markets of Europe USA andJapan the FMCG sector is rife with several new life-style products in the Personal careand Wellness categories. Beauty care products such as Anti-Ageing creams Beauty Balmsand Complexion Correction creams Hair colorants cosmetic and therapeutic toothpastes areseeking premium tubes as a key marketing mix. In the emerging markets such as IndiaChina Far East and Latin America the FMCG usage is expanding helped by increasingdisposable income growing youth population expansion of modern retail/e-tail and growingaspiration to look and feel good. The Pharma demand too is buoyed by increasing lifeexpectancy growth of generics and "health for all" policies pursued globally bygovernments and the NGOs. Your Company as a global supplier of innovative packagingsolutions for products in the paste/cream/gel forms continues to ride this tremendousopportunity in the FMCG/Pharma space by leveraging its scale multi-national manufacturingand marketing set up and proven innovation/ technology capability. In addition tobenefitting from growth in the FMCG/Pharma brands traditionally packed in tubes yourCompany is also actively involved in seeking to replace packaging forms such as extrudedplastic/aluminum tubes bottles and tottles with its new generation laminated tubesoffering a superior value proposition for a number of FMCG brands.
India accounted for 37% of your Company's Consolidated Sales. As a pioneer and longestablished supplier of laminated tube solutions your Company continues to enjoy amassive franchise in India among the FMCG/ Pharma players. The Customer portfolioencompassing reputed FMCG and Pharma brands - Indian and MNC mass and niche establishedand new continues to expand. As expected the year started strong with sales tracking15.3% y-o-y growth by the second quarter. Exports to markets in South Asia Middle Eastand Africa continue to be pursued as a strategy to gain presence in the smaller marketswhich are not viable for a full-fledged manufacturing set up.
As part of its strategy to stay competitive and grow during the year your Companyundertook consolidation of its manufacturing sites in the Western India. This led to aphased shut down of three small plants and the commissioning of a state of art factory atDhanoli near Vapi. In ensuring an orderly transition without compromising on customerservice the Company had to incur significant one-off costs which impacted the profit forthe year. Going forward this restructure of the manufacturing sites is expected to yieldoperational and cost synergies and facilitate seamless capacity expansion cateringespecially to the high value Non-oral care categories.
Just as the Company was gearing to step up its sales further by ramping up newcontracts it had to contend with customer off-take issues following the Demonetisationannounced in November 2016. In the four months following the customer off-take droppedFurther;the imminent implementation of GST from July 2017 caused the customers to keeptheir inventory pipeline lean and new product activities on low key. So while thesereforms long term will boost demand and growth the Company had to absorb the impact inthe short term. The subdued revenue growth coupled with capacity and operating costsalready on ground including the one off costs relating to consolidation of units impactedthe profitability during the year.
Your Board is of view that India growth story remains intact and your Company is wellpositioned to grow and gain market share in the months and years to come.
Subsidiaries Joint Ventures and Associates Being a global player in the laminatedtubes your Company has manufacturing and marketing presence in eleven other countriesthrough its direct and step down subsidiaries joint venture and associate.
All these subsidiaries / joint ventures / associate continue to work closely with thecustomers and grow their business with product offerings relevant to their respectivemarkets. All the operating subsidiaries posted profit during the year except thesubsidiary in Colombia. The new manufacturing facility established during the year by theColombian subsidiary has taken longer to stabilize. Consequently sales did not realise asplanned whereas the operating costs were significantly higher on account of significantone-off expenditure incurred in stabilising the operations and the plant productivity.This resulted in the subsidiary posting loss for the year. The operations are faststabilizing now and the market potential both local and exports continues to be strongfor the subsidiary to turn profitable again in the next financial year. The Associatecompany in Indonesia posted a small loss on account of cost increases.
During the year Lamitube Technologies Ltd (LTL) a wholly owned subsidiary of theCompany acquired the balance 75.1% stake in its German Joint venture thus making theGerman entity a wholly owned subsidiary of your company effective 30 September 2016. Thisacquisition will help to unlock synergies such as enhanced cross selling opportunity inthe European markets sourcing flexibility and better capacity utilization at theCompany's Europe plants. It will further enhance your Company's position in the non-oralcare category.
Considering the huge size of the non oral care category market in these geographies andthe disruptive nature of the packaging solutions that your Company has introduced theBoard expects these subsidiaries to post sustained profitable growth. The development atthese entities and the markets they operate in are further discussed in the ManagementDiscussion and Analysis (MDA) forming part of this report. The salient features of thefinancial statements of these subsidiaries associate and joint venture in the prescribedform is attached as a part of audited financial statements.
CONSOLIDATED FINANCIAL STATEMENTS
In compliance with the Companies Act 2013 and SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 (the Listing Regulations) Consolidated financialstatements of the Company and its subsidiaries associate / joint venture have beenprepared for the year under report as per IndAS applicable to the Company beginning thefinancial year ending March 2017. The audited Consolidated financial statements along withthe auditors' report thereon form part of this Annual report. The consolidated financialstatements presented by the Company include the financial results of all its subsidiariesjoint venture and Associate. The Audited financial statements of these entities have beenreviewed by the Audit Committee and the Board.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management discussion and analysis (MDA) report for the year under review of theoperations of your Company and all of its subsidiaries associate / joint venture is givenin a separate section of this Annual Report and forms part of this Annual Report.
The Company is committed to maintain highest standards of corporate governance alignedwith the best practices. Pursuant to applicable provisions of the SEBI (Listing Obligationand Disclosure Requirements) Regulations 2015. a detailed report on Corporate Governanceforms part of this Report. The Company is in compliance with the various requirements anddisclosures that have to be made in this regard. A certificate from the Auditorsconfirming compliance of the conditions of Corporate Governance as stipulated under theListing Regulations forms part of the Annual Report.
Your Directors are satisfied that with various initiatives undertaken over the last fewyears your Company continues to be on the path of profitable growth. The Company's cashflows and financial position continue to be strong.
Considering the cash requirement for business growth and debt servicing the Boardadvocate a policy of steady dividend payout in a band of 20-25% of the consolidated netprofit subject to statutory provisions applicable dividend tax and unforeseen exigencies.The Board believes this will serve the interests of the shareholders especially thosedependent on regular income. Accordingly your Directors recommend a dividend of Rs. 2.40per equity share of face value of Rs. 2 each for the financial year ending on 31 March2017 (previous financial year: Rs. 2.20 per share of face value of Rs. 2 each).
Dividend Distribution Policy of the Company is given as a part of this Report marked asAnnexure 1 and also posted in investors section on the Company's website or link http://
TRANSFER TO RESERVES
Pursuant to the guidelines requiring creation of Debenture Redemption Reserve (DRR) tothe extent of 25% of the value of listed debt securities issued your Company has duringthe year under review transferred a sum of Rs. 750 lakhs to DRR in relation to the listeddebt securities issued and outstanding of Rs. 9000 lakhs. There is no specific statutoryrequirement to transfer any sum to General reserve in relation to the payment of dividend.
FINANCE AND ACCOUNTS
Your Company continued to reduce financial leverage and the finance cost by enhancingcapital productivity and improving cash generation. Working capital continued to be afocus area. Receivables inventories and other working capital parameters were kept understrict check through continuous monitoring.
Your directors are pleased to inform that Credit Analysis & Research Limited (CARE)has revised upwards from CARE AA- (Double A minus) to CARE AA (Double A) the credit ratingassigned to the Company's NCDs as well as the rating assigned to the Company's variouslong term bank facilities and have further re-affirmed the CARE A1+ rating assigned tothe short term bank facilities. The Company is also rated by India Ratings and Research(FITCH Group) who have reaffirmed the Company's long term issuer rating at IND AA and theCommercial Paper rating at IND A1+.
Forex exposures continued to be closely reviewed and appropriately hedged in order tominimize risk to the results during a year when the currency volatility was very high.
The merger of Whitehills Advisory Services Pvt. Ltd and the acquisition of the balancestake in your Company's German Joint ventures have been given effect in your Company'sStandalone and Consolidated Financial statements as per applicable Accounting Standardsand Court approval and as explained in the relevant notes to those financial statements.There is no material impact to accounts because of Whitehills merger. The German entity'sfinancials are now included 100% line by line in the consolidated financial statementspost the acquisition date of 30 September 2016. Prior to that and in the
previous year your company's 24.9% share in its profit after tax and equity only wasincluded in the consolidated financial statements.
Both the Standalone and the Consolidated Financial statements set out the informationand details prescribed by Ind AS in connection with the transition from the earlier GAAPto Ind AS for financial accounting and reporting.
M/s. MGB & Co. LLP Chartered Accountants were appointed as Statutory Auditors atthe Annual General Meeting (AGM) of the Company held on 9 July 2014 for a term of threeyears subject to ratification by the members annually. Accordingly they will cease tohold office at the conclusion of the forthcoming AGM and in view of section 139(2) of theCompanies Act 2013 will not be eligible for further re-appointment.
It is therefore proposed to appoint M/s. Ford Rhodes Parks & Co. LLP CharteredAccountants as Statutory Auditor of the Company for a term as mentioned in AGM Notice. TheCompany has received letter from them to the effect that their appointment if made will bewithin the prescribed limits and confirming that they are not disqualified for suchappointment pursuant to the Companies Act 2013 and applicable statutory provisions.
Accordingly the Audit Committee and Board of the Company have considered andrecommends to the members for their appointment as a Statutory auditor of the Company atthe ensuing Annual General Meeting.
Pursuant to the provisions of section 204 of the Companies Act 2013 M/s. D M Zaveri& Co. Practicing Company Secretary (CP No. 4363) have been appointed to undertakethe secretarial audit of the Company for the year ended on 31 March 2017. The secretarialaudit report forms part of this Report and is annexed as Annexure 2. The said report doesnot contain any qualification adverse remarks or disclaimer.
Pursuant to section 148 and applicable provisions of the Companies Act 2013 and theCompanies (Cost Records and Audit) Rules 2014 the Company is required to appoint costauditor for audit of cost records maintained by the Company in respect of the financialyear ending 31 March
2018. Your Directors have on the recommendation of the Audit committee appointed M/s.R Nanabhoy & Co. Cost Accountants as the Cost Auditor to audit the cost records forthe financial year ending 31 March 2018. Remuneration payable to the Cost Auditor issubject to approval by the members of the Company. Accordingly a resolution seekingmembers' approval for the remuneration payable to M/s R Nanabhoy & Co CostAccountants is included in the Notice convening the Annual General Meeting along withrelevant details including the proposed remuneration.
Dr. Subhash Chandra Director and Chairman resigned from the Board with effect from 5August 2016 keeping in view his becoming member of Upper house of the Parliament of India(Rajya Sabha) and his wish to serve the nation. The Board expresses its immenseappreciation and gratitude for the valuable advice and guidance rendered all these yearsby Dr. Chandra as Director ever since he founded this Company in the course of his longand distinguished career as an entrepreneur. In view of the resignation of Dr. Chandrathe Board has appointed Mr. Ashok Goel as Chairman and consequently recommends theshareholders to pass resolution re-designating him as Chairman & Managing Director ofthe Company.
In accordance with the provisions of section 152(6) of the Act and the Articles ofAssociation of the Company Mr. Atul Goel Director is liable to retire by rotation at theensuing Annual General Meeting (AGM) and being eligible offers himself forre-appointment. The Board recommends his re-appointment.
All the Independent Directors have given declarations that they meet the criteria ofindependence laid down under Section 149 of the Companies Act 2013 and the ListingRegulations.
Further details on the Directors including remuneration remuneration policy criteriafor qualification independence meetings etc. are given in the Corporate GovernanceReport which forms part of this Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a) that in the preparation of the annual financial statements for the year ended 31March 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b) that such accounting policies as mentioned in note 3A to the Financial Statementshave been selected and applied consistently and judgment and estimates have been made thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company as at 31 March 2017 and of the profit of the Company for the year ended onthat date;
c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) that the annual financial statements have been prepared on a going concern basis;
e) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
f) that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
Audit Committee of the Board has been constituted as per the Listing Regulations andsection 177 of the Companies Act 2013. Constitution meetings attendance and otherdetails of the Audit Committee are given in Corporate Governance Report which is part ofthis Report.
The Board has carried out the annual evaluation of its own performance and of each ofthe directors individually including the independent directors as well of the working ofits committees. The manner in which the evaluation has been carried out has been explainedin detail in the Corporate Governance Report which forms part of this Annual Report.
The Company's policy on programmes and measures to familiarize Independent Directorsabout the Company its business updates and development includes various measures viz.issue of appointment letters containing terms duties etc. management informationreports presentation and other programmes as may be appropriate from time to time. ThePolicy and programme aims to provide insights into the Company to enable independentdirectors to understand the business functionaries business model and others matters.The said Policy and details in this respect is displayed on the Company's website.
CORPORATE SOCIAL RESPONSIBILITY
As a part of its Corporate Social Responsibility (CSR) initiative the Company hasundertaken CSR projects and programs. Thrust areas for CSR include care and empowerment ofthe underprivileged education health and environment and sanitation. These activitiesare in accordance with CSR activities as defined under the Act. The Company has a CSRCommittee of Directors. Details about the Committee CSR activities and the amounts spentduring the year as required under section 135 of the Act and the related Rules reasonsand other details are given in the CSR Report as Annexure 3 forming part of this Report.
The Company has framed a CSR Policy in compliance with the provisions of the Act andthe same is placed on the Company's website www.esselpropack.com. The CSR Policy lays down areas of activities thrust area types of projects programsmodes of undertaking projects/programs resources etc.
Your directors are pleased to report that the Company's subsidiaries overseas alsoactively give back to the society in their respective geographies through variousinitiatives on the health education and other fronts.
LOANS GUARANTEES AND INVESTMENTS
Details of loans guarantees and investments covered under applicable provisions ofsection 186 of the Act are given in the note 55 to the standalone financial statements.
RELATED PARTY TRANSACTIONS
Contracts/arrangements/transactions entered by the Company during the financial yearwith related parties were on an arm's length basis and in the ordinary course of business.All related party transactions are placed for approval before the Audit Committee and alsobefore the Board wherever necessary in compliance with the provisions of the Act andListing Regulations. During the year the Company has not entered into anycontracts/arrangements/ transactions with related parties which could be consideredmaterial in accordance with the policy of the Company on material related partytransactions or under section 188(1) of the Act. Accordingly there are no particulars toreport in Form AOC2.
Details of the related party transactions during the year as required under ListingRegulations and Accounting standards are given in note 54 to the Standalone FinancialStatements.
The policy on dealing with the Related Party Transactions including determiningmaterial subsidiaries is posted in investors / corporate governance section on theCompany's website or link http://www.esselpropack.com/wp-content/uploads/2015/03/Related-Party-Transaction-Policy.pdf
Relations with employees across all the offices and units continued to be cordial. HRpolicies of the Company are focused on developing the potential of each employee. Withthis premise a comprehensive set of HR policies are in place aimed at attractingretaining and motivating employees at all levels. Your Company had 1134 employees onpayroll as of 31 March 2017.
The statement containing particulars of employees as required under Section 197(12) ofthe Companies Act 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed herewith as Annexure 4(a) andforms part of this Report.
The median employee's remuneration and other details in terms of Section 197(12) of theCompanies Act 2013 read along with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed herewith as Annexure 4(b)and forms part of this Report.
EMPLOYEE STOCK OPTIONS
The Nomination and Remuneration Committee of the Board of Directors (NRC) of theCompany inter alia administers and monitors the Employee Stock Option Scheme 2014("ESOS 2014" or "Scheme") of the Company in accordance with applicableSEBI regulations.
The disclosure relating to the Scheme and other relevant details are posted ininvestors>corporate governance section on the Company's website or link
The amortised cost of options based on their fair value at the respective grant datesforms part of the Employee benefit expense in the manner required by the Ind AS.
Out of the 2953000 options granted in the past NRC in its meeting held on 17 June2016 has vested 938661 Options in terms of the Scheme and the grant letter the date ofvesting being 1July 2016.
Your Directors believe this Scheme will help create long term value for shareholdersand operate as long term incentive to attract and retain senior managerial talent. For thesake of clarity this Scheme does not extend to any of the Directors and Promoters of theCompany.
ENERGY TECHNOLOGY & FOREIGN EXCHANGE
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as Annexure 5 andforms part of this Report.
OTHER INFORMATION / DISCLOSURES
There are no significant material orders passed by the regulator courts or tribunalwhich would impact the going concern status of the Company and its future operation.
There have been no material changes and commitments affecting the financial position ofthe Company occurred between end of financial year and date of this Report.
In accordance with section 134(3)(a) and section 92(3) of the Act an extract of theannual return as at 31 March 2017 in Form MGT 9 forms part of this Report as Annexure 6.
As per applicable provisions of the Listing Regulations business responsibility reportis given herewith and form part of this Report as Annexure 7.
Wherever applicable refer the Company's website www. esselpropack.com or relevantdetails will be provided to the members on written request to the Company Secretary.
The Company has in place a policy against sexual harassment at work place in line withthe requirements of the concerned statute. Internal complaint committees are set up inthis respect. There was no complaint received from any employee during the year nor anycomplaint remains outstanding for redressal as on 31 March 2017.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a whistle blower policy laying down a vigil mechanism to deal withinstances of unethical behavior fraud or mismanagement. The said policy has beenexplained in the Corporate governance report and also displayed on the Company's website
INTERNAL FINANCIAL CONTROL
The Company has a proper and adequate Internal Financial Control System to ensure thatall assets are safeguarded and protected against loss from unauthorized use or dispositionand the transactions are authorized recorded and reported correctly.
The Internal Financial control is exercised through documented policies guidelines andprocedures. It is supplemented by an extensive program of internal audit conducted by inhouse trained personnel and external firms of Chartered Accountants appointed onrecommendation of the Audit Committee and the Board. The audit observations and correctiveaction if any taken thereon are periodically reviewed by the Audit committee to ensureeffectiveness of the Internal Financial Control System. The internal financial control isdesigned to ensure that the financial and other records are reliable for preparingfinancial statements and other data and for maintaining accountability of persons.
During the year as part of control assurance process the financial controls werereviewed by an independent agency in line with the guidelines issue by ICAI on internalfinancial controls and reported satisfactory in design and operational effectiveness.
The Company has laid down a well-defined risk management mechanism covering the riskmapping and analysis risk exposure potential impact and risk mitigation measures. Adetailed exercise is carried out every year to identify evaluate manage and monitor theprincipal risks that can impact the Company's ability to achieve its strategic andfinancial objectives. The Board periodically reviews the risks and suggests steps to betaken to control and mitigate the same through a properly defined framework. Details onthe risk elements which the Company is exposed to are covered in the Management Discussionand Analysis which forms part of this Annual Report. The Company has formally framed aRisk Management Policy to identify and assess the key risk areas monitor and reportcompliance and effectiveness of the policy and procedure. The Risk management committeeunder the chairmanship of an independent director oversees the risk management process.
The Scheme of Amalgamation between your Company with Whitehills Advisory ServicesPrivate Limited (Whitehills) its holding company and their respective shareholders (theScheme) approved earlier by the members was sanctioned by the Hon'ble Bombay High Courtvide its order dated 1st September 2016. The amalgamation became effective following thefiling by the Company of the certified copy of the said court order with the Registrar ofCompanies Maharashtra on 6 October 2016. Pursuant to the approved Scheme and the HighCourt Order 88917843 equity shares of face value of Rs. 2 each of the Company havebeen allotted as fully paid up to the shareholders of the Whitehills in October 2016. Asprovided in the approved Scheme 88917843 equity shares at face and paid up value ofRs. 2 each held by Whitehills in your Company were cancelled and extinguished.
There has been neither any change in the paid-up equity capital nor any change in thepromoter and public shareholding of the Company by virtue of the Scheme. Pursuant to theScheme the shareholders of Whitehills directly hold shares in the Company. This helped insimplification of the holding structure and reduction of shareholding tiers. There is noany material financial impact on the Company because of the said amalgamation as allrelated costs were met by the holding company's funds.
Your Company has not accepted any deposits from the public and there are no outstandingdeposits as on 31 March 2017.
Statements in this Report and the Management Discussion and Analysis may be forwardlooking within the meaning of the applicable securities laws and regulations. Actualresults may differ materially from those expressed in the statement. Certain factors thatcould affect the Company's operations include increase in price of inputs availability ofraw materials changes in government regulations tax laws economic conditions and otherfactors.
Your directors wish to place on record their sincere thanks and appreciation to all ourcustomers suppliers banks authorities members and associates for their co-operationand support at all times and to all our employees for their unstinted contribution to thegrowth and profitability of your Company's business and look forward to continuedsupport.