Balkrishna Paper Mills Ltd Management Discussions.

OUT LOOK:

Global economy is facing a confluence of risks, which could severely disrupt economic activity and inflict significant damage on longer-term development prospects. These risks include an escalation of trade disputes, an abrupt tightening of global financial conditions, and intensifying climate risks.

Despite an improvement in growth prospects at the global level, several large developing countries saw a decline in per capita income in 2018. Even among the economies that are experiencing strong per capita income growth, economic activity is often driven by core industrial and urban regions, leaving peripheral and rural areas behind.

After strong growth in 2017 and early 2018, global economic activity slowed notably in the second half of last year, reflecting a confluence of factors affecting major economies. Global growth is now projected to slow from 3.6 % in 2018 to 3.3% in 2019, before returning to 3.6% in 2020.

Indian Paper and Paper products industry growth is expected to be driven by a combination of factors such as rising income levels, growing per capita expenditure, rapid urbanization and a larger proportion of earning population which is expected to lead consumption. According to CRISIL Research, over the next 5 years (2017 to 2022), global paper demand is expected to grow at a subdued pace.

Companys Overview

Your Company is engaged in manufacturing and marketing of quality Coated Duplex Boards. Due to the slowdown in economy worldwide, underutilisation of capacity and high debt burden, we could not increase the realisation rates in line with the expenses. All these factors affected the performance of the Company.

Your Company is trying to improve its realisation by manufacturing more high value for money products and also expanding its market base in domestic as well as overseas market.

Internal Audit and Control

Your Companys maintains all its records in ERP Systems and maximum approvals are routed through this system. The Company has laid down adequate systems and supported by the procedures for ensuring internal financial controls. The Company has appointed an external audit firm as Internal Auditors for day to day checking and monitoring the internal control measures. Internal Auditors are present at the Audit Committee Meetings where internal Audit Reports are discussed along with management comments and the final observation of the Internal Auditor.

Opportunities Threats and Risk

The existing Paperboard players alive to the emerging international threats, have been aggressively pursuing quality improvement programmes, coupled with cost rationalisation. Increasingly, more modern technologies are sought to be implemented, with added focus on environmental compliance.

Human Resources

Relation between the Management and the labour were cordial throughout the year under review. The Management persistently promote a culture of employee recognition and motivation.

Forward Looking Statement

Statements in the Management Discussion and Analysis describing the Companys objectives, predictions may be "forward looking statements" within the meaning of applicable laws and regulations. The actual results could differ materially from the forward looking statements contained in this document due to certain risks and uncertainties, which include the effect of economic and political conditions in India, Government policies, new regulations that may affect the Company business.