1. INDUSTRY STRUCTURE, DEVELOPMENTS AND OUTLOOK
Toys have been recognized as one of the champion sectors with
significant export potential. The Indian toy industry is among the fastest-growing
globally, projected to reach $3 Bn by 2028 growing at a CAGR of 12% between 2022-28. The
Indian Toy Industry is expanding its global presence with increased high-value exports to
Middle East and African countries. The import duty on toys was increased from 60% to 70%
in Budget 2023.The Toys Quality Control Order (QCO) was implemented in 2021 to enhance
standardization in toy production and import, ensuring product safety. The toy sector is
dominated by small and medium sized manufacturers. Over 4000 toy units in the MSME sector
significantly contribute to both manufacturing and exports to large global and domestic
brands.
The Government of India is planning to provide comprehensive support to
promote "vocal for local" in toys through National Action Plan for Toys(NAPT) by
bringing together 20+ Ministries/ Departments. The Government has taken proactive steps to
restrict import of sub-standard and unsafe toys and to promote domestic toy industry. A
Quality Control Order for Toys was issued on 25/02/2020, through which toys have been
brought under compulsory certification from Bureau of Indian Standards (BIS) with effect
from 01-01-2021.As per the Order, every toy in the market must confirm to the requirements
of relevant Indian Standard and bear the Standard Mark under a license from BIS as per
Scheme-I of BIS (Conformity Assessment) Regulations, 2018. As a result of various steps
taken by the government, the volume of import of toys into the Indian market has shown a
consistently decreasing trend. BIS has granted 1000+ licenses to domestic manufacturers
and 28 licenses to foreign manufacturers for manufacturing of toys with BIS Standard marks
(as of Dec,2022).
The toy retail market in India is a vibrant and growing sector that
offers immense opportunities for both local and global sellers. India is proud of our
local toy craftspeople and sellers, who have been producing quality and innovative toys
for generations. We are also delighted to see global toy brands in and entering India, who
bring their expertise to influence the rich toy industry in India. We believe there is
potential for collaboration between local and global brands, benefitting the consumers and
Indias economy.
2. OPPORTUNITIES AND THREATS
India is the worlds second largest producer of polyester and
related fibers, accounting for 8% global share for plush toys; availability of plastics,
paper boards and textiles at competitive prices. Domestic players possess technical
expertise in precision tooling and are actively expanding their capabilities to address
the shortage of ready-made molds and structures. India stands out as an advantageous
destination due to its comparatively lower labor costs among other competing geographies.
We have a large consumer base as India has a large population of children aged 014, which
accounts for about 26.22% of the total population. This creates a high demand for toys in
the country. Indias GDP growth and rising middle-class population have increased the
purchasing power of consumer, who can now afford to buy more toys for their children. The
proliferation of online platforms and digital payments has made it easier for consumers to
access a wide variety of toys and games from different brands and regions. The government
of India has launched various initiatives to promote the domestic toy industry, such as
vocal for local toys campaign, Toycathon, Aatmanirbhar Toys Innovation Challenge, etc.
These initiatives aim to boost innovation, quality, safety, and competitiveness of Indian
toys and reduce dependence on imports.
The company most recently participated in South East Asias
largest Toy Fair at Pragati Maidan, New Delhi at India Expo Centre & Mart which was
aimed at boosting toy manufacturing in India and improving existing market potential &
share. Also the company participated in Spielwarenmesse International Toy Exhibition in
Nuremberg, Germany which brings together all international decision makers.
On the other hand, Competition from cheap and low-quality imports from
countries like China is another challenge for the Indian toy industry. China accounts for
80% of the toy imports in India, which affects the domestic toy manufacturers adversely.
Indian Toy Industry is still significantly fragmented, with 90% of the market being
unorganized because of which harnessing the maximum benefit becomes very difficult.
However, in recent years, the toy industry in India has witnessed
steady growth. Industry reports have affirmed that the growth and total revenues of the
leading toy companies in India have grown substantially.
3. SEGMENT WISE PERFORMANCE
Company manufactures plastic molded products ranging from automotive
components to children playground equipments and all the operations of the Company
are considered as a single business segment due to homogeneity of plastic products.
4. RISKS AND CONCERNS
Risk management is embedded in the companys operating framework.
The Company believes that risk resilience is a key to achieving higher growth. To this
effect, there is a robust process in place to identify key risks across the Company and
prioritize relevant action plans to mitigate these risks. The Company has duly approved a
Risk Management Policy. The objective of this Policy is to have a well-defined approach to
risk. The Policy lays down broad guidelines for timely identification, assessment and
prioritization of risks affecting the Company in the short and foreseeable future. The
Policy suggests framing an appropriate response for the key risks identified, so as to
make sure that risks are adequately addressed or mitigated. The Company has laid down
procedures to inform the Audit Committee as well as the Board of Directors about risk
assessment and management procedures and status. The Audit Committee of the Company has
been entrusted with the task to frame, implement and monitor the risk management plan for
the Company and it is responsible for reviewing the risk management plan and ensuring its
effectiveness with an additional oversight in the area of financial risks and controls.
Major risks identified by the business and functions are systematically addressed through
mitigating actions on a continuing basis.
5. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate internal financial control in place with
regard to financial statements. Such controls were evaluated throughout the year, while no
reportable material weaknesses, in the design or operations, were observed. Internal
Control is an integral component of an organizations management that provides
reasonable assurance of the effectiveness and efficiency of operations, reliability of
financial reporting and compliance with applicable laws and regulations. The Board has
ultimate responsibility for management of risks and ensuring the effectiveness of internal
control systems. The Company carefully considers the appropriate balance between controls
and risk in their programs and operations.
6. OPERATIONS AND FINANCIAL REVIEW
The operations and financial review is covered in the Directors
Report and is to be read as a part of this report itself.
7. HUMAN RESOURCES/ INDUSTRIAL RELATION
Our human capital has played a pivotal role in shaping OK PLAY into
what we are today. The company believes in embracing technology and continue to use it to
our advantage to make processes simpler and more efficient. We constantly strive to
improve our operations, integrate our business through the value chain and optimize our
performance through operational efficiencies and innovative technological solutions. The
Company is fundamentally committed to protecting the environment while ensuring
healthcare, safety and welfare for all its employees, contractors and communities. The
Company is dedicated to performing its duties in a safe, environmentally responsible and
effective manner. Our peoples proficiency and skills strongly hold the foundation of
our success. The Company empowers the people by providing them opportunities across
spectrums including leadership and professional development. Building of managerial and
technical competencies is an area of constant focus. The Company has a total strength of
116 employees as on 31 March 2023. We constantly strive to improve our operations,
integrate our business through the value chain and optimize our performance through
operational efficiencies and innovative technological solutions. The Company continues to
set a fine record of industrial harmony with positive outcomes of effective performance.
8. DISCLOSURE OF ACCOUNTING TREATMENT
The Financial Statements have been prepared in accordance with the
Companies (Indian Accounting Standard) Rules, 2015 (Ind AS) prescribed under Section 133
of Companies Act, 2013 and other recognized accounting practices and policies, to the
extent applicable.
9. KEY FINANCIAL RATIOS
| STANDALONE |
2022-23 |
2021-22 |
Change (%) |
| Debtors Turnover Ratio |
23.72% |
37.53% |
-13.81% |
| Inventory Turnover Ratio |
40.60% |
66.29% |
-25.69% |
| Interest Coverage Ratio |
1.00 |
0.04 |
96.41% |
| Current Ratio |
0.88 |
0.76 |
12.17% |
| Debt Equity Ratio |
1.81 |
1.24 |
56.80% |
| Operating Profit Margin |
17.34% |
16.44% |
0.90% |
| Net Profit Margin |
-3.36% |
-11.35% |
7.98% |
| Return on Net Worth |
-11.29% |
-18.57% |
7.28% |
| CONSOLIDATED |
2022-23 |
2021-22 |
Change (%) |
| Debtors Turnover Ratio |
8.87% |
12.59% |
-3.72% |
| Inventory Turnover Ratio |
41.65% |
66.21% |
-24.56% |
| Interest Coverage Ratio |
1.17 |
0.19 |
97.27% |
| Current Ratio |
0.89 |
0.74 |
14.92% |
| Debt Equity Ratio |
2.04 |
1.50 |
54.18% |
| Operating Profit Margin |
17.76% |
15.42% |
2.33% |
| Net Profit Margin |
-1.39% |
-7.59% |
6.20% |
| Return on Net Worth |
-6.95% |
-19.74% |
12.79% |
10. CAUTIONARY STATEMENT
Statements in this Integrated Annual Report, particularly those that
relate to Management Discussion and Analysis, describing the Companys objectives,
projections, estimates and expectations, may constitute ‘forward-looking
statements within the meaning of applicable laws and regulations. Although the
expectations are based on reasonable assumptions, the actual results might differ.
| Place: New Delhi |
Rajan Handa |
| Date: 06th September, 2023 |
Managing Director |
+91-9892691696
