Doing the right things is management i.e. implementing the vision. We have successfullybuilt reputation in the business by focusing on a customer-centric approach with nocompromise on quality building strong brands vast distribution channels fostering aninclusive environment supporting and nurturing our community and society at large andplaying the role of a good corporate citizen.
At HSIL these guiding principles have helped us achieve sustainable growth andstakeholder respect.
Doing things right
Businesses today operate in an environment which is evolving with an increased level ofgovernance and compliance in line with the new regulations which have come in force overlast few years. The changes in laws and regulations also provide new opportunities for theorganisation to grow in terms of efficiency improved controls increased customersatisfaction and market penetration. At HSIL we have focused on building a robustgovernance and compliance system that focuses on ensuring that the Company satisfies theever-changing needs of the operational and regulatory environment in which it operates.The Board of Directors and the senior management work in tandem to ensure that the companystays abreast of evolving laws and remains compliant. We believe that good governancehelps us perform efficiently which in turn helps us in winning the stakeholder'sconfidence. We believe that governance and compliance are not restricted merely to theadherence of rules and regulations but is about the larger objective of creating value.Governance is not merely structure and process but a complete system with purpose inputsand output that involves people with value-creation at its heart.
Doing the right things
'Strategy without tactics is the slowest route to victory. Tactics without strategy isthe noise before the defeat" - Sun Tzu
The key to success for any organisation is to merge strategy (creating the vision) withtactics (implementing the vision).
The consumer of today does not need yesterday's products designed a little differentlyand passed off as 'innovation'. Consumers are demanding new product features need betterdesigns and a superior price-value proposition. We are continuously investing in newproduct introductions that promise an entirely new experience to users. We are expandingproduct permutations as well addressing a wide range of preferences. Our consumers do notonly need to buy sanitaryware but also seek to buy a number of lifestyleenhancingdomestic products. Based on market feedback we launched a number of products andbusinesses to carve out a larger share of wallet spending.
Our consumer is also being influenced by convenience as regard to where to buy thelargest quantity of complementary building products from a single location. Given thisreality we invested in retail gallerias showrooms and shop-in-shops that stock all ourproducts under one roof in addition to an online presence.
In order to meet the consumer's requirement of buying the best quality of products wehave invested in number of pan-India experiential retail centres that are in sync with thequality products that we market and our overall positioning of being a lifestyle-enrichingcompany.
The consumer of our products seeks to buy at a point in time but be assured offirst-rate support and service at any time thereafter. Given this reality our company isextending and continuously investing from what was once a manufacturing-centric focus towhat is now a fusion of manufacturing distribution service and support competencies.
Investing in the future
For the last five-and-a-half decades we have worked towards creating value for ourstakeholders. We have realised that the source of value has shifted from the tangible tothe intangible. Apart from the financial capital and tangible assets that opticallyrepresent the main value drivers intangible assets such as human capital relationshipswith business partners brand loyalty and company's innovation continue to create muchstronger value in the eyes of the consumer.
We have created intangible assets in the form of relationships with the people ororganisations a company sells its products to relationship with organisations orindividuals through which a company sells or is doing business with in general aninnovation pipeline of new leading- edge products that will increase the company's marketshare and will generate new profitable revenues in the future a highly skilled andtalented work force committed to the company ever-progressing business processes and acorporate culture that helps to convert individual knowledge and skills into relationshipvalue and innovation capital.
Business today is characterised by relentless change. To stay competitive companiesmust continually grow and evolve. The aim of any organisation should be to renounce oldhabits which act as hindrances to growth and find new paths of progress. This approachhas led us to maintain our leadership position in our core businesses and at the same timebreak fresh ground in our pursuit for finding new avenues of growth. With an aim to investin the future we forayed into the consumer products I business in 2015. Our move has paid
I AM OPTIMISTIC THAT WE HAVE CREATED ENOUGH STRENGTH WITHIN THE ORGANISATIONTHAT CAN WITHSTAND DOWNTRENDS BETTER REBOUND FASTER AND CAPITALISE ON THE EVOLVING STRONGOPPORTUNITIES EMERGING IN THE INDIAN AND GLOBAL MARKETS WITH GREATER DYNAMISM THAN EVER.
Rich dividends as we have been able to generate good volumes and reach out to a newertarget audience. We had also invested in two greenfield plants to produce plastic plumbingpipes and fittings as well as security caps and closures (required in packaging) as anextension of our existing portfolio. These new plants are expected to commence commercialproduction during FY2017-18.
Building a better world
To be socially relevant one needs to be socially responsible. At HSIL this has beenone of our guiding principles since inception. We recognise that in order to achievesustainable growth an organisation needs to contribute to the development of the nationimprove quality of life of its workforce and immediate families address the needs of thecommunity and enrich the sector of its presence.
Over the years HSIL focused on women's empowerment primary education supportproviding access to clean drinking water sanitation and healthcare for the poor amongother grassroots interventions. We have earnestly supported girl child education and weintend to sustain this across the foreseeable future. During the year under review wecommissioned four primary healthcare centres called 'Swastha Sampada' with the objectiveto provide healthcare facilities to the marginalised contributing in a small way towardsbuilding a better future for all.
A large part of our corporate philanthropic intent has extended beyond statutoryrequirement. Your company has been spending a majority of its CSR outgo in the areas ofits manufacturing presence during the year under review it spent more than what wasmandated. Much of this culture has been drawn from the enduring family culture of thepromoters. From my childhood I inculcated the habit of giving and gifting whichcontinues till today.
Over time the company's philanthropic engagement has extended towards sectoral benefitas well. As simple sanitaryware pieces became progressively sophisticated with respect todesign electronic feature integration and improved tank fittings there emerged a growingneed for these to be installed and serviced by technically qualified and trained plumbers.The gap between need and availability inspired the Company's engagement in the area ofplumber training coinciding with the government's Skilling India priority. Following thecreation of the Ministry of Skill Development I was asked to head one of the SkillCouncils with the objective to train and certify 1.2 million plumbers by 2022. It is ahuge responsibility and a separate not-for-profit company was formed independently tocarry out this task. I have been attached to the field of plumbing. This initiative willbenefit the sector at large providing manufacturers the confidence to create moresophisticated products service customers better and provide a sustainable livelihood formillions - a win-win for all.
I am optimistic that we have created enough strength within the organisation that canwithstand downtrends better rebound faster and capitalise on the evolving strongopportunities emerging in the Indian and global markets with greater dynamism than ever.
This is the optimism that I wish to extend to all our stakeholders.
Dr. Rajendra Kumar Somany
Chairman and Managing Director.