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Date Submitted: 12/18/2013 11:45 AM
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DIRECTORS’ REPORT
DIRECTORS’ REPORT & MANAGEMENT DISCUSSION AND ANALYSIS
Your Directors have pleasure in presenting the Seventy-sixth Annual Report of your Company and the Audited Accounts for the financial year ended March 31, 2013. GENERAL ECONOMIC ENVIRONMENT The year under review, has been a difficult year for the Indian industry. Global trade flows to EU zone have been severely impacted due to loss of credibility of the European sovereign debt paper. This has led to credit squeeze resulting in decline in export volumes for the emerging market nations. Simultaneously, our nation has been grappling with rising oil and gold imports. This double impact has led to further widening of current account deficit thereby creating added pressure on government finances. Also, the Indian rupee continued to remain weak. Cigarettes among tobacco sector have become easy victim to government drive to shore up its revenues. Food inflation has been unrelenting and is in double digits even when the headline inflation numbers have started moderating. With high food inflation, discretionary spends have come under pressure. High inflation coupled with increase in prices of consumer goods has led to erosion of price value equation and forced the RBI to pursue tight monetary policy. Many brands across the cigarette industry have seen significant losses in volumes. IMF forecasts real global GDP growth of 3.3% in 2013, about the same as the 3.2% in 2012, and the expectation is that growth rates will improve to 4% the year after. All this is hinging on the economic successes of emerging countries especially China and India. Emerging markets are expected to grow between 5% to 6% in the next 2 years. Countries having local demand have witnessed resilience in these turbulent times compared to export centric economies. With the United States showing signs of coming out of a low growth phase and no further negative news emerging from...