3B Films Ltd Management Discussions

1. INDUSTRY STRUCTURE AND DEVLOPEMENT:

The India Packaging Market size is estimated at USD 101.12 billion in 2025, and is expected to reach USD 169.73 billion by 2030, growing at a CAGR of 10.73% during the forecast period (20252031).

• The demand for packaging in India has expanded drastically, spurred by the rapid growth in consumer markets, especially in processed food, personal care, and pharmaceutical end-user industries. Packaging is Indias one of the fastest growing sectors. Over the last few years, the industry has been a key driver of technology and innovation, contributing to various manufacturing sectors, including agriculture and the fast-moving consumer goods (FMCG). The packaging industry is driven by the factors such as rising population, increasing income levels, and changing lifestyles are anticipated to drive consumption across various industries leading to higher demand for packaging product solutions. Moreover, demand from the rural sector for packaged products is fueled by the growing media penetration through the Internet and television.

• The packaging industry in India is diverse and serves a diverse range of products and industries. Companies have established manufacturing facilities in the country and used these domestic facilities as a base to export to other nations due to the governments positive promotion of the Make in India policy. The government has implemented a plan to lower tax rates for new manufacturing businesses to transform India into a global manufacturing hub. In addition, the government intends to further level the playing field in the industry by launching several initiatives to support the growth of packaging and technological advancements, in addition to the need for domestic businesses to compete with multinational corporations.

S ource:https: //www.mordorintelligence.com/industry-reports/packaging-industry-in- india

2. OPPORTUNITIES AND OUTLOOK:

India exports plastic to more than 200 countries in the world. The top five consumer and houseware product importing countries are the USA, Germany Japan, the UK, and France. India largely exports plastic and related products to the USA, China, the UAE, the UK, Germany, Italy, Bangladesh, etc. The total value of exports to the USA, the largest consumer of the Indian plastic industry. China was the second largest consumer of plastic export products from India. The total plastic exports from India to France and in order to boost exports to France and Europe, PLEXCONCIL collaborated with the Indo-French Chamber. The Plastic Export Promotion Council (PLEXCONCIL) PLEXCONCIL was established by the Ministry of Commerce and Industry in 1955. The main objective of this non-profit organization is to highlight India as a reliable supplier of high-quality products. PLEXCONCIL is the apex body of the plastics industry in the country and represents more than 2,500 exporters who manufacture and trade plastics products ranging from plastic raw materials to semi-finished and finished items. (Source: https://www.ibef.org/exports/plastic-industry-india)

3. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:

Our Company is in the business of manufacturing and supply of CPP & CPE films tailored to meet the diverse needs of the flexible packaging industry and high-end thermoforming applications and thus play a pivotal role in delivering innovative packaging solutions to our clients of a wide array of industries. Our product portfolio includes a wide range of CPP films designed to address

the specific needs of various industries, including food and beverage, clothing, flowers and other consumer goods. From high-clarity films for premium packaging to high-barrier films for extended shelf life, we offer solutions that cater to the evolving demands of the market as we presently are equipped with such a manufacturing facility capable of producing CPP & CPE films spanning a thickness range from 15 to 250 microns.

4. RISK AND CONCERNS:

Competition Risk

Competitive risk is the chance that competitive forces could prevent the Company from achieving its goal on account of declining revenues or margins.

Market Risk

Market risk is the risk of losses in positions arising from movements in market prices.

Mitigation: The Director of the Company are vigilant on roles and responsibilities in understanding the movements and market situations.

Workforce Risk

Workforce risks can arise from issues such as critical skill shortages, increasing staff attrition or significant workforce retirement.

Mitigation: The Company trains its employees and ensures best HR practices, while carrying out improvements and rewards to attract and retain the best talent in the industry.

Policy Risk

Policy risk concerns the possibility that national governments — acting in their sovereign capacity — amend policy environments in ways that adversely impacts the financial stability of the Company.

Mitigation: The Company is proactive in monitoring and abiding by policies in a timely manner. Supply chain risk

Supply chain risks include logistical, economic, political, cultural, competitive and infrastructural concerns.

Mitigation: The Company is continuously working on a comprehensive management strategy to counter supply chain disruptions through a holistic approach. By diversifying its suppliers the Company expects to moderate risk factor.

Compliance Risk

Compliance risk captures the legal and financial penalties for failing to act under internal and external regulations and legislature.

Mitigation: The Company is aware of the legal, financial, reputational, and business impact due to non-compliance risk. The Company has a system to ensure regular compliance and monitoring thereof.

5. INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY:

The internal control system is an integral part of the general organizational structure of the Company. The system is highly structured and totally in sync with the size and nature of its business. This process is aimed at pursuing the values of both procedural and substantial fairness, transparency and accountability. The internal control system is basically a set of rules, regulations, policies which allows enhanced monitoring. The organization is appropriately staffed with qualified and experienced personnel for implementing and monitoring the internal control environment.

6. FINANCIAL PERFORMANCE:

A. Standalone Financial Performance:

i. Revenue from Operations:

Revenue from operations for the year ended on March 31, 2025 and March 31, 2024 is Rs. 8530.75 Lakhs and Rs. 7574.89 Lakhs respectively.

ii. Expenditure:

The total expenditure for the year ended on March 31, 2025 and March 31, 2024 is Rs. 8006.07 Lakhs and Rs. 7061.70 Lakhs respectively.

iii. Profit before Tax:

The profit before tax of the company for the year ended on March 31, 2025 and March 31, 2024 is Rs. 582.46 Lakhs and Rs. 578.09 Lakhs respectively.

iv. Profit after tax:

The profit after tax/net profit of the company for the year ended on March 31, 2025 and March 31, 2024 is Rs. 505.13 Lakhs and Rs. 514.34 Lakhs respectively.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Financial Year 2024-25 was marked by a strong performance across all geographies and product categories, with market share gains and improvement in operating margins, as compared to the previous Financial Year. The Revenue from operations has increased from Rs. 7,574.89 Lakhs for financial year ended 31st March 2024 to Rs. 8,530.75 Lakhs for the Financial year ended 31st March, 2025. While net profit growth shows a much stronger acceleration in profitability aided by higher operating leverage.

Our focus remains on strengthening our balance sheet as we fund our expansions through our internal accruals. The strong cash flow generation has led to an improvement in overall financial ratios.

The details of Financial Performance are mentioned elsewhere in this report

8. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. Your directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year. Industrial relations were cordial throughout the year.

Sr. No	Ratio	Methodology	For the year ended
			31/03/2025	31/03/2024
1.	Current Ratio (in times)	Current Assets over Current Liabilities	1.69	2.03
2.	Debt Equity Ratio (in times)	Total Liabilities over Total Shareholders Equity	2.90	4.48
3.	Debt Service Coverage Ratio, (in times)	Net Operating Income over Debt Service	1.67	2.32
4.	Return on Equity Ratio (ROE) (in %)	Net Income(annual) over Total Assets	17.10	24.27
5.	Inventory turnover ratio (in times)	Cost of Goods Sold over Avg. Inventory	1.17	1.07
6.	Trade 4Receivables turnover ratio (in times)	Net credit sales over Average Accounts Receivable	5.68	10.93
7.	Trade payables turnover ratio (in times)	Credit Purchase over verage Accounts Payable	5.10	8.99
8.	Net capital turnover ratio (in times)	Net Sales over Average Total Assets	2.72	3.14
9.	Net profit ratio (in %)	Net Profit over Sales	5.92	6.79
10.	Return on Capital employed (in %)	EBIT over Total Assets - Total Current Liabilities	8.25	9.74
11.	Return on Net Worth (in %)	Net Profit over Cost of Investment	14.30	21.64

Notes:

EBIT - Earnings before interest and taxes

PBIT - Profit before interest and taxes including other income

EBITDA - Earnings before interest, taxes, depreciation and amortisation.

PAT - Profit after taxes

Debt includes current and non-current lease liabilities

Adjusted expenses refers to sub-contractor charges and other expenses net of non-cash expenses and donations

Capital employed refers to total shareholders equity and debt.

Investments includes non-current investment, current investment and margin-money deposit

DSCR, ROCE and Inventory Turnover Ratio of Previous year are recalculated according to current year

methodology.

9. HUMAN RESOURCES

The Company considers its employees as its main assets. The management believes in the philosophy of the development of the Company with the development of its employees. Proper environment of work, all necessities and their safety is looked after. The well-being of its employees is always a priority to the company. The employees are given proper guidance and

training to execute their tasks. Hence, higher degree of work satisfaction is enjoyed by the employees of the company.

10. ENVIRONMENT. HEALTH & SAFET Y (EHS)

The Company commits to ethical and sustainable operation in all business activities. Company maintains and implements an Environmental Management System (EMS) for meeting the purpose of organizations policy and objectives regarding environment. The aims of the system is use of processes, practices, techniques, materials, products, services or energy to avoid, reduce or control the creation, emission or discharge of any type of pollutant or waste, in order to reduce adverse environmental impacts. Adequate Occupational Health & Safety Management System is adopted by the Company for ensuring the conformance to the Occupational Health & Safety Management System, legal & statutory requirements, continual improvement and satisfaction of interested parties (i.e. customers, suppliers, employees and public).

11. CAUTIONARY STATEMENT:

No reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions, predictions etc. may constitute forward looking statements contained herein. Certain statements contained in this document may be statements of future expectations, forecasts and other forward-looking statements that are based on managements current view and assumptions. Such statements are by their nature subject to significant uncertainties and contingencies and the actual results, performance or events may differ materially from those expressed or implied in such statements. Readers are cautioned not to place undue reliance on any forward-looking statement.

For and on Behalf of the Board
3B FILMS LIMITED
S/D
Mr. Ashokbhai Dhanjibhai Babariya
Chairman & Managing Director
DIN :03363509
904, Milestone,
B/H. New Bright Day School,
Vasna Bhayli Road,
Vadodara - 391410,
Gujarat India
Date: 04/09/2024
Place: Vadodara