The Board of Directors presents hereunder an analysis of performance of
the Company for the year 2022-23 and its outlook for the future. This outlook is based on
current business environment which may vary due to future economic and other developments.
Industry Structure and Development Global Economic Review:
The pulp and paper industry is one of the largest industries in the
world and increased the contribution in the global economic. It is dominated by North
American, Northern European and East Asian companies. Latin America and Australasia also
have significant pulp and paper industries. Over the next few years, it is expected that
both India and China will become key players in the paper industry. The pulp and paper
industry is a large and growing portion of the worlds economy. The pulp and paper
industry is faced with mounting environmental, political, and economic pressures to reduce
the volume and toxicity of its industrial wastewater. During the last few years, the
concept of system closure has been gaining popularity in the forest products industry with
reason of the concept offers more flexibility in the sitting of new mills, including
consideration of mill locations with limited fresh-water resources.
Paper products refers to items made up of paper products or
commodities, such as paper towels, napkins (tissues paper), corrugated paper, and similar
forms of cellulosic products that contain no more than 10% of non-cellulosic material by
weight or volume, such as laminates, binders, coatings, or saturates. The main types of
paper products are converted paper products, unfinished paper and pulp mills. The
converted paper products industrial category consists mostly of companies that manufacture
paper products from acquired paper and paper board. Wood and agro residue, waste and
recycled paper are used as raw material to produce paper products, basically this type of
paper industry called agro paper based paper industries. The different applications
include writing paper, magazine paper, packaging paper, sanitary paper and other. The
paper products market research report is one of a series of new reports from the Business
Research Company that provides paper products market statistics, including paper products
industry global market size, regional shares, competitors with a paper products market
share, detailed paper products market segments, market trends and opportunities, and any
further data you may need to thrive in the paper products industry. This paper products
market research report delivers a complete perspective of everything you need, with an
in-depth analysis of the current and future scenario of the industry
In the point of global paper industries, total global paper products
market grew from $974.14 billion in 2022 to $1036.59billion in 2023 at a compound annual
growth rate (CAGR) of 6.4%. The Russia-Ukraine war disrupted the chances of global
economic recovery from the COVID-19 The war between these two countries has led to
economic sanctions on multiple countries, a surge in commodity prices and supply chain
disruptions, causing inflation across goods and services and affecting many markets across
the globe. The paper products market is expected to grow to $1293.15 billion in 2027 at a
CAGR of 5.7%.
The paper products manufacturing market is expected to benefit from
steady economic growth forecasted for many developed and developing countries. According
to the International Monetary Fund (IMF), the global GDP growth reached 3.3% in 2021 and
3.4% in 2021. Recovering commodity prices, after a decline in the historic period is
further expected to be a significant factor driving economic growth. The US economy is
expected to register stable growth during the forecast period. Additionally, emerging
markets are expected to continue to grow slightly faster than the developed markets in the
forecast period. Greater economic growth is likely to drive public and private
investments, joint ventures, foreign direct investments in the end-user markets, thereby
driving the market during forecast period.
The Indian paper industry is highly fragmented. It comprises of small,
medium, and large paper mills with paper production capacity ranging from 10 to 1650
tonnes per day. As the primary raw resource for paper manufacture in the Indian
hinterland, wood and agricultural waste is extensively used. The Indian paper industry is
famous for its production of writing, newspaper, and commercial paper etc. Mills generate
newsprint-grade paper using recycled wastepaper as the primary raw source. However, the
raw material base has been changing significantly over the years. The paper industry in
India produces 5 per cent of the worlds total paper. India accounts for about 5 per cent
of the global paper market. The market is worth about US$ 8 billion. The paper industry in
India generates an estimated Rs. 70,000 crore in yearly revenue, with a domestic market
size of Rs. 80,000 crore. The paper industrys tax contribution to the Government is
around Rs. 5,000 crore.
Opportunities
Paper industry is constantly growing worldwide, since paper consumption
in consumer market is endless. With changing word and improving life style of individuals
makes a difference in every industry with new possibilities and different industries like
hoteling, packing, online market, and personal hygiene awareness in people will going to
make positive changes in pulp and paper industry. A global market of consumers concerned
about the environment has been created due to technological advancements. The Paper
manufacturers have been looking for alternative petroleum-based products that are both
biodegradable and preferable from an environmental standpoint.
In current days paper is best option and demand of paper increased day
by day, the demand of paper due to many reasons, which are:
a. Anti-Plastic thinking: There is either a reduction or elimination of
the use of plastic in packaging. Antiplastic sentiment encourages biodegradable pulp and
paper alternatives. This movement is being pushed forward by various government agencies
as well as citizens who are concerned about their health. The problems caused by plastic
present a wealth of opportunities for the paper and pulp manufacturing sector.
b. The rise in online market: In global markets are seeing an increase
in the sale of products online day by day. It is anticipated that this pattern will carry
on furtherance of years. Because of the proliferation of online shopping, packaging has
had to develop to make the most efficient use of shelf space. There has been an increase
in the demand for raw materials and corrugated boxes.
c. Food-packaging: The food packaging industry is undergoing change.
Recently, there has been a rise in demand for packaging that is resistant to grease. This
component can be found in a wide range of different packaged goods and restaurants and
paper is used to packaging the food.
The potential of growth for the industry lies in development of the
economy, rising literacy rates, consumerism and standard of living. All these factors are
in a positive move in India at present, which gives a good picture to the scenario of
paper industry. Indian Economy is growing very fast. Its ratings in the world have
improved during the few years. The world is showing keen interest in the Indian Market. So
Indian Paper Industry is at an advantageous position to make the most of the opportunity
offered by changing economic order.
As uses of these papers which are required in Food, courier, education,
automobile, medicine and water, etc. industries have a good scope in India to set up their
manufacturing units. India is the biggest importer of tea bag filters and also the cold
storage papers are not being manufactured here which are used in the packaging of
vegetables and fruits.
At present new machines come with various facilities helping to improve
the efficiency and financial viability of mill. Your Company is always in search of such
opportunities and is in the process of increasing its capacity and quality improvement. In
the near future the Company is in the process of increasing its capacity.
Threats/Risks
Now these days Indian paper industry has a material place in global
industries and due to globalization every treats for global industries is threats to
Indian industry. Globally paper and pulp industry is facing significant threats related to
deforestation and the loss of biodiversity. According to a report by WWF, over 80% of the
worlds intact forest landscapes are at risk of being destroyed by human activities, and
the paper industry is one of the major drivers of this destruction. (Source: World
Wildlife Fund) According to a report by the Environmental Paper Network, the paper
industry is the fifth-largest consumer of energy worldwide and the third-largest
industrial emitter of greenhouse gases. It is responsible for approximately 5% of global
carbon emissions.
Paper manufacturing industries faces many threats and challenges that
need to be addressed in order to ensure its sustainability and growth, some threats and
challenges facing the paper manufacturing industry are here: Environmental Impact: In
paper manufacturing industries environmental issue is one of most critical issue. In the
paper manufacturing there are significant amount uses of natural recourses like water,
wood, energy, many types of chemicals and other materials having impact on environment.
Our industry agro based paper manufacturing unit that means we use agricultures products
to manufacturing the paper. We used sugarcane bagasse in manufacturing line and also used
waste paper as required.
This includes using recycled materials, reducing waste and energy use,
and implementing water conservation measures. In addition, the industry needs to work with
governments and other stakeholders to develop policies and regulations that promote
sustainable practices and protect the environment.
Manufacturing Cost: Manufacturing cost is also one of threats for the
company/industry. Paper industry is one of most expensive industry because it required
heavy capital investment in plant and machinery, raw material, building, administration,
labor, equipment and working capital etc, as a result, the cost of production can be a
major factor in the profitability and sustainability of paper manufacturers. One of the
challenges facing the industry is the need to balance cost with other factors, such as
quality, sustainability, and efficiency. In paper industry continuously investing in new
technologies to improve efficiency can be costly in the short term but can lead to
long-term cost savings and sustainability benefits. In addition, the paper manufacturing
industry also faces pressure from consumers and stakeholders to maintain competitive
pricing while also addressing environmental and social concerns. After facing challenges
it is needs to focus on improving efficiency, reducing waste, and investing in sustainable
practices and technologies that can improve profitability and reduce costs in the long
term.
Intermediaries: In paper industry intermediaries play vital role. This
industry believe on intermediaries because these intermediaries includes from supplier of
raw material to dealer i.e. purchaser of final paper mean include supplier of raw
material, internal and external parties and dealer, distributors and retailers. In strong
industry required effective intermediaries which ensure reliable supply of raw materials
and finished products, as well as to meet customer demands and comply with environmental
and social standards. This requires the industry to work with suppliers and stakeholders
to develop sustainable sourcing practices and ensure compliance with environmental and
social standards. Global events effects the intermediaries like supply of raw material,
finished products and also in import and export.
Reuse or Recycling: Reuse or recycling is another critical issue for
paper industry. Infact recycling is backbone of paper industry, mostly paper manufacturing
industry used to waste paper for manufacturing of finished paper i.e. final product.
Recycling of paper not only a complicated and but also a costly process in meantime.
Contamination, is the most hurdle in the recycling because the company received waste
paper with other materials, such as food waste or plastic, it can make it difficult to
recycle and can reduce the quality of the recycled product. This contamination can occur
at any point in the recycling process, from collection to processing, and can result in
additional costs for the industry.
Research and Development ("R&D"): R&D is another
critical issue and challenges facing the paper manufacturing industry. The industry needs
to continuously innovate to remain competitive, improve efficiency, reduce costs, and
address the challenges facing the industry, such as environmental concerns and changing
consumer preferences. One area of innovation in the industry is the development of new and
improved paper products.
Segment or product wise Performance
During the year the company has achieved the good level of capacity
utilization with respect to the manufacture of the paper and it was done due to the
expertise of the Managing Director, the technical staff and the hard- work of our
labourers. This is a good example of proper utilization of the capacity with minimum
resources. The company is engaged in single segment of production i.e. manufacturing of
paper, more than 98% of the turnover are depend paper segment. In relation of financial
performance of the segment are: The Company has turnover (Net) of Rs. 22,216.5/- (In
lakhs) as against previous figure of Rs. 14,079.85/- (In lakhs), the Company recorded
increase in sale 57.79% (approx) further the Company recorded other Income in the
respective year of Rs. 411.03/- (In lakhs) as against previous figure of Rs. 185.79/- (In
lakhs), the Company recorded increase in other income 121.23% (approx). As total income of
current year is Rs. 22,627.53/- (In lakhs) and previous year was of Rs. 14,265.64/- (In
lakhs), the Company recorded increment of 58.51%. During the year under review PBDFET
(Profit before Depreciation, Finance, Exceptional Item and Tax) was Rs. 1610.06/- (In
lakhs) as compared to previous year figure of Rs. 1002.04/- (In lakhs), posting a increase
by 60.68% (approx) and PBFET (Profit before Finance, Exceptional Item and Tax) was Rs.
1053.48/- (In lakhs) as compared to previous year figure of Rs. 453.59/- (In lakhs),
posting a increase by 132.25% (approx) and PBET (Profit before Exceptional Item and Tax)
was Rs. 705.48/- (In lakhs) as compared to previous year figure of Rs. 127.76/- (In
lakhs), posting a increase by 452.19% (approx). Further under review PBT (Profit before
Tax) was Rs. 705.48/- (In lakhs) as compared to previous year figure of Rs. 127.76/- (In
lakhs), posting a increase by 452.19% (approx) in PBT. Net profit and PAT (Profit after
Tax) was Rs. Rs. 491.56/- (In lakhs) as compared to previous year figure of Rs. 196.14/-
(In lakhs) reporting an increase of 150.62% (approx) in net profit as compared to previous
year. Net profit and PATOCI (Profit after Tax and Other Comprehensive Income) was Rs.
491.56/- (In lakhs) as compared to previous year figure of Rs. 198.76/- (In lakhs)
reporting a increase of 147.31% (approx) in net profit as compared to previous year.
Earning Per Share was during the year Rs. 3.51/- (Each Equity Share) as compared to
previous year figure of Rs. 1.4/- (Each Equity Share) reporting a increase of 150.79%
(approx) in EPS as compared to previous year. Further under review Free Reserve and
Surplus (Other Equity) was Rs. 2407.01/- (In lakhs) as compared to previous year figure of
Rs. 1915.44/- (In lakhs), posting a increase by 25.66% (approx) and Cash and Cash
Equivalents was Rs. 5.35/- (In lakhs) as compared to previous year figure of Rs. 87.15/-
(In lakhs), posting an decrement by -93.86% (approx).
Outlook
Measures of improvement for the paper industry:
1. Strong R& D for improving technology & automation.
2. Energy and Water should be used in a judicious way.
3. Effluent Standards should be improved by adopting green
technologies.
4. Social Forestry methods should be used for improving the shortages
in raw-material.
5. Specialized training should be imparted to enhance the skills and
knowledge of man-power.
Internal Control System and Their Adequacy
Your Company possesses a good internal control system to ensure that
all the assets are safe guarded and protected against the unauthorized use or disposition
and that transactions are authorized recorded and reported correctly. The Audit Committee
of the Board of Directors review the internal control system and their adequacy from time
to time.
Discussion of Financial Performance with respect to operational
performance
The Financial Statements have been prepared in accordance with the
requirements of the Companies Act, 2013 and applicable Indian Accounting Standards (INDs)
issued by the Institute of Chartered Accountants of India. The Management of Mohit Paper
Mills Limited accepts the integrity and objectivity of these financial statements as well
as the various estimates and judgments used therein. The Statement has been made on
prudent basis and reflects in a true and fair manner. Details of financials of the company
for the financial year 2022-23:
Details of financials as per IND AS:
(Rs. in Lakhs)
| Particulars |
Current Financial Year (2022-2023) |
Previous Financial Year (2021-2022) |
| Revenue from Operations |
22,216.50 |
14079.85 |
| Other Income |
41.03 |
185.79 |
| Total Income of the company |
22,627.53 |
14265.64 |
| Profit before Depreciation, Finance Costs, Exceptional
items and Tax Expense |
1609.96 |
1002.04 |
| Less: Depreciation/ Amortisation/ Impairment |
556.48 |
548.45 |
| Profit before Finance Costs, Exceptional items and Tax
Expense |
1053.48 |
453.59 |
| Less: Finance Costs |
348.00 |
325.83 |
| Profit before Exceptional items and Tax Expense |
705.48 |
127.76 |
| Add/(less): Exceptional items |
0.00 |
0.00 |
| Profit before Tax Expense |
127.76 |
127.76 |
| Less: Tax Expense (Current & Deferred) |
213.92 |
(68.38) |
| Profit for the year (1) |
491.56 |
196.14 |
| Other Comprehensive Income (2) |
0.00 |
2.62 |
| Total Comprehensive Income (1+2) |
491.56 |
198.76 |
| No. of Equity Share Capital of Rs. 10/- each |
140 |
140 |
| Paid-Up Equity Share Capital of Rs. 10/- each |
1400 |
1400 |
| Earning Per Equity Share |
|
|
| 1. Basic EPS |
3.51 |
1.40 |
| 2. Diluted EPS |
3.51 |
1.40 |
Corporate/Operational Review:
Your Companys management is committed to aegis of the Company in
every situation and also committed to achieving its objectives and goals. Presently the
Company engaged in single segment i.e. manufacturing of paper, the management of the
Company always keeps keen eyes on every transitions of the Company. The company is moving
fast to maximization the wealth of shareholders and stakeholders of the Company.
In paper industry The Company is regularly exploring and critically
appraising its domestic market, the company saw downfall in respect of revenue and other
aspect in the last year due to stiff competition in the market. The Company has maintained
good standards in its products and always be trying to give sharpness to the
Companys marketing strategies.
On the part of financial performance of the Company during the
financial year 2021-2022, the financial and non-financial performance gives good
indicators for golden future of the Company. In this year the Company gives unexpected
return and growth in sales and profits. The Company has recorded immense growth during the
year under review. The Company has turnover (Net) of Rs. 22,216.5/- (In lakhs) as against
previous figure of Rs. 14,079.85/- (In lakhs), the Company recorded increase in sale
57.79% (approx) further the Company recorded other Income in the respective year of Rs.
411.03/- (In lakhs) as against previous figure of Rs. 185.79/- (In lakhs), the Company
recorded increase in other income 121.23% (approx). As total income of current year is Rs.
22,627.53/- (In lakhs) and previous year was of Rs. 14,265.64/- (In lakhs), the Company
recorded increment of 58.51%.
During the year under review PBDFET (Profit before Depreciation,
Finance, Exceptional Item and Tax) was Rs. 1610.06/- (In lakhs) as compared to previous
year figure of Rs. 1002.04/- (In lakhs), posting a increase by 60.68% (approx) and PBFET
(Profit before Finance, Exceptional Item and Tax) was Rs. 1053.48/- (In lakhs) as compared
to previous year figure of Rs. 453.59/- (In lakhs), posting a increase by 132.25% (approx)
and PBET (Profit before Exceptional Item and Tax) was Rs. 705.48/- (In lakhs) as compared
to previous year figure of Rs. 127.76/- (In lakhs), posting a increase by 452.19%
(approx).
Further under review PBT (Profit before Tax) was Rs. 705.48/- (In
lakhs) as compared to previous year figure of Rs. 127.76/- (In lakhs), posting a increase
by 452.19% (approx) in PBT. Net profit and PAT (Profit after Tax) was Rs. Rs. 491.56/- (In
lakhs) as compared to previous year figure of Rs. 196.14/- (In lakhs) reporting an
increase of 150.62% (approx) in net profit as compared to previous year. Net profit and
PATOCI (Profit after Tax and Other Comprehensive Income) was Rs. 491.56/- (In lakhs) as
compared to previous year figure of Rs. 198.76/- (In lakhs) reporting a increase of
147.31% (approx) in net profit as compared to previous year. Earning Per Share was during
the year Rs. 3.51/- (Each Equity Share) as compared to previous year figure of Rs. 1.4/-
(Each Equity Share) reporting a increase of 150.79% (approx) in EPS as compared to
previous year.
Further under review Free Reserve and Surplus (Other Equity) was Rs.
2407.01/- (In lakhs) as compared to previous year figure of Rs. 1915.44/- (In lakhs),
posting a increase by 25.66% (approx) and Cash and Cash Equivalents was Rs. 5.35/- (In
lakhs) as compared to previous year figure of Rs. 87.15/- (In lakhs), posting an decrement
by -93.86% (approx).
Human Resources/Industrial Relations
Human resource is the best resource of all the resources because it is
the one which can properly take advantage of the other resources. It is the Companies
belief that Human Resources is the driving force towards progress and success of the
company. The Company seek to motivate and retain its professionals by offering reasonable
compensation and opportunity to grow in the organization. The total permanent employees
strength of the Company was 149 as on 31st March, 2023. Industrial relations remain
cordial during the year.
Cautionary Statement
Statements in the management discussion and analysis describing the
Companies objectives, projections, estimates, expectations may be forward looking
statements within the meaning of applicable securities laws and regulations. Actual
results may differ from those expressed and implied. Important matters that effects the
companys performance is the economic conditions of demand and supply and price
conditions in t he domestic and overseas market in which the Company operates, changes in
the government regulations, tax laws and other statutes and other incidental factors.
For and on behalf of the Board of Directors
of Mohit Paper Mills Limited
Sd/-
Sandeep Jain
Chairman & Managing Director
DIN: 00458048
Place: New Delhi
Date: August 25, 2023
+91-9892691696
