Essel Propack Ltd Management Discussions.

Your Directors are pleased to present the Management Discussion and Analysis for the year ended 31 March 2019.

BUSINESS OVERVIEW

Your Companys business is an integral part of the FMCG and Pharma space, packaging being one of the four key Ps of Marketing mix that underpin the success of any brand.

The FMCG business across categories of Beauty and Cosmetics, Foods, Home care and Oral care constitutes a multitrillion dollars market globally and continues to grow in many different ways. In the developing economies, the growth is powered by increasing young population, growing disposable income, life-style changes etc. In the developed economies where penetration and usage of FMCG products is already high, there is still a churn happening in the sense that new products addressing the contemporary lifestyle needs and aspirations emerge while some of the traditional products get phased out, for e.g. products like Anti-ageing creams, Beauty balms, Complexion creams, Sun protection creams, and of late, Hair colorants and styling gels etc. are some of the new and growing applications. There is also a growing trend for products to go the organic, natural and herbal way. Yet another disruption we see these days, is caused by the e-commerce. Leveraging the power of social media and the digital market place made possible by the Internet, a number of startups are active in the FMCG space offering customized, attractive and niche products to a net- savvy consumer.

Clamouring for a share of consumers mind and wallet in this highly dynamic and competitive scene, the brands look to leverage Packaging as first moment of Truth as if it was an important spokesperson on their behalf, be it on the retail shelf or on a web portal. Packaging therefore is not merely something necessary to hold and protect the product, but is a key value enhancer for the brand.

That is where your Company fits snugly in the scheme of things. A range of FMCG and pharma products in viscous form such as pastes, gels and creams use tube as a packaging format. The world market for tubes is huge, about 36 billion in the countries your Company operates. Of this, oral care tubes account for 14 billion, Beauty & Cosmetics account for 12 billion and Pharma & others account for 10 billion. Beauty & Cosmetics applications are pre-dominantly in extruded Plastic tubes and bottles and Pharma are pre-dominantly in Aluminum tubes. The non-oral care tube market represents much higher value, three times or more as compared to oral care tube market.

Having established global leadership with its laminated tubes for the oral care category, your Company began to pursue a considerably bigger market opportunity in the non-oral care category. This also is the space where market is getting more and more dynamic and throwing up opportunities with new products, new applications, new brands and expanding consumption as outlined earlier. With its global manufacturing and marketing presence, large scale, strong R&D and New Product Development (NPD) capability, state of art equipment, your Company has been active and growing inter alia in the high value add non oral care category. Its growth in the non-oral care category is further powered by the larger diameter tube packaging format in the case of Beauty & Cosmetics and Pharma and Food migrating from extruded plastic/ aluminium tubes and bottles to the new generation laminated tubes, a trend in some way heralded by the new generation laminated tubes introduced by your Company as a superior value proposition for these categories. Your Companys laminated tubes provide superior customized barrier property, outstanding look and feel, shorter leadtime and improved Sustainability features in comparison to the traditional plastic/ aluminium tubes and bottles. Moreover one of the key trends emerging in the packaging tubes industry is that of "premiumization" which is further expected to boost growth.

In the case of pharmaceuticals, use of aluminium tubes for packaging is going out of favour for reasons of concerns on product safety and supply security. High barrier, safe laminated tubes with features such as tamper evidence, anti-counterfeit and innovative dispensing, offered by your Company, are finding increasing acceptance as a superior packaging format by both the OTC and Prescription drugs.

Categories such as Foods and Home care, are now seeing tube as an attractive packaging format and a value enhancer compared to bottles and other traditional packaging for a range of products such as condensed milk, Wasabi sauce, Cheese spread, glue / adhesives etc.

OPERATIONAL PERFORMANCE REVIEW

During FY 19, your Companys consolidated revenue exclusive of excise duty was 2707 crores, higher by 11.7% over previous year. The operating profit (excluding other income) grew by 3.1% to 315 crores with the operating margin reduced by 100 bps to 11.6%, mainly on account of higher material costs, increase in depreciation and operating costs. Key factors, largely temporary blips, contributing to this are:

• Revenue growth in India was impacted on account of certain regulatory changes in Pharma industry, transporters strike and lower off take from key customers (no change in our wallet share)

• Stabilization and ramping up of newly opened Assam Plant in North India

• Gradual ramping up of volumes from key customers in Europe in Oral care

• Delay in commercialization of non oral care customers in Europe

• Operating Margin was impacted by exchange rate fluctuations and initial expenditure incurred towards various strategic programs and new location/ relocation like Assam and Russia and shall normalize going forward yielding benefits from these initiatives

The operational performance has been analyzed by business segments below.

SEGMENT PERFORMANCE REVIEW

Your Companys business is in plastic packaging materials.

The business is managed by four geographical segments viz.

1 Americas (with operations in the USA, Mexico and Colombia)

2 Europe (with operations in the UK, Germany , Poland and Russia)

3 AMESA - Africa, Middle East & South Asia (with operations in Egypt and India)

4 EAP - East Asia Pacific (with operations in China and Philippines)

Segment Financial Highlights

The table below sets out the segment financial highlights

for the year:

Particulars FY ended 31 March 2019 FY ended 31 March 2018 Growth
Revenue:
Americas 58888 48846 +20.6%
Europe 58517 50959 +14.8%
AMESA excl. India excise duty 95963 91230 +5.2%
EAP 66730 57437 +16.2%
Profit Before Interest and Tax (PBIT)
Americas 8180 6112 +33.8%
Europe 1790 1200 +49.2%
AMESA 12721 14123 -9.90%
EAP 10473 9061 +15.6%

Developments in each of the regions are set out below:

AMERICAS

Your Company has a strong market presence in both North and South America, through its wholly owned subsidiaries in USA, Mexico and Colombia.

Following the closure of the extruded plastic tube operations in US, the laminated tube unit in the USA has taken to actively marketing your Companys new generation laminated tubes to non oral care customers, winning new awards which should see commercialization in the next year. A Second Very High Speed tubing line - "Shot line", has been introduced during the year which is being stabilized. At the back of this increased capacity, due to new Shot line in USA, we are winning more business from existing customers as well as new customers. Customer servicing was sustained at high levels in this demanding market. Revenue growth in USA was 22.4% helped by increase in off take by key customers and better product mix. Non-oral care revenue share was 14.9%. EBITDA margin moved up by 2.4pp to 19.6%.

The Mexico unit revenue growth was 9.4% helped by strong share in revenue of non-oral care category (40.1%). However product mix impacted the EBITDA margins which was lower by 3.6 pp at 16.7%.

The Colombia unit revenue growth was 20.8% helped by strong share of non-oral care category (47%) however product mix and adverse currency fluctuations impacted EBITA margins which were at 10.6%. However, adverse currency fluctuation caused the Unit to post net loss despite improved operating performance. More initiatives are under way to drive Sales growth including through exports to neighboring markets, closely monitored by the Regional management, which should get the Unit post healthy results in the next year.

With Colombian operations improving further and helped by higher non oral care category sales in the US and Mexico units, the Region is poised for improved performance going forward.

EUROPE

Your Company sells both laminated tubes and extruded plastic tubes in Europe. It has manufacturing presence in Poland, Russia and Germany.

Europe revenue grew at 14.8% for the year, aided by growth in both oral care and non-oral care categories.

The Poland Unit revenue growth was at 15.3% with key Oral care customer off take normalizing during second half of the year. Non oral care revenue share was lower by 2.2 pp at 47.9%. EBITDA margin improved by 1.7 pp at 9.6% due to operating efficiencies and better product mix.

The Germany unit revenue growth was at 21% helped by strong growth in non-oral care revenue share by 5.1 pp at 74.7%. The unit continued to post double digit EBITDA margin.

In Europe, we have seen a robust pipeline for Germany as well as in case of Poland, where we can see new business coming in.

During the year Russian unit was relocated to new location as current space was inadequate for future growth. The Russia unit showed revenue growth of 10.4%; however due to extra non-recurring costs relating to relocation, the unit has shown small loss.

Russia unit having or being shifted to a new improved facility, all our factories globally would have been upgraded by Class 100000 clean room. So that means that every tube that we make, we make in an environment, which is suitable for production for pharmaceutical grades.

Europe being the largest tube market continues to be a focus market for your Company. There is potential for your Company to grow strongly on its current small market share by driving new product and business development in a structured way backed by its new generation laminated tubes and advanced decoration capability. The new business development pipeline is being monitored closely and buffer is being created to counter delays or failure in individual brand launch. The Poland unit is also in the process of de-bottlenecking its extruded plastic tube capacity to address the changing customer specifications. New customers are being developed in Russia to drive top line and bring it back to profit.

AMESA (Africa, Middle East and South Asia)

This Region is serviced by your Company from its six units across India and by its subsidiary in Egypt.

India sale growth was muted at 2% on account of lower off take from key customers and lower off take from pharma customers due to changes in regulations for pharma category requiring prominent display of generic name vis-a-vis brand name, leading to change in the artwork of packaging material and supply chain corrections by pharma customers. Nevertheless, your Company continued new customer and new product development efforts targeting the pharma and cosmetics categories. With a view to participating in the opportunity thrown up by FMCG industry growth in the North Eastern States, your Company has set up a custom-built factory near Guwahati, Assam which is a strategic investment, in-line with our stated objective of go and grow with customers. Your company also commissioned new laminator in Dec 2018, thereby more than doubling the capacity of laminate production.

The Indian Pharma regulation issues have been addressed by the industry and we expect volumes to see an uptick going forward. The business pipeline in India is very strong and expected to yield results going forward including the ramp up of Assam and commissioning of new laminator.

Egypt posted robust revenue growth of 35.4% y-o-y on the back of strong growth in both oral and non-oral care categories. The unit is actively working to develop more customers and across all categories including exports to the MEA region.

EBIDTA margin in India impacted due to off take issues as explained above and EBIDTA margins in Egypt were lower by 1.8 pp at 18 % due to higher revenue growth in oral care category.

AMESA continues to promise significant growth opportunities especially in the Cosmetics and Pharma categories where the growing population, low per capita consumption, changing aspirations, increasing disposable incomes are seen to drive consumption in a big way. Brands, both MNCs and Local, are looking to grow and gain share of the consumer spend in this Region. Your Company is involved in several exciting new business development projects in the non-oral care categories with several niche brands. In India, your Company is now the leading solution provider to Pharma category, replacing aluminum tubes with laminated tubes in a big way. Short term blip because of Pharma regulation change in India, notwithstanding, the Region is expected to benefit from the economic growth and a large diversified customer base in the comingyears.

EAP (East Asia Pacific)

Your Company has manufacturing presence in this region through subsidiaries in China and the Philippines.

China for long has been a large and successful operation for your Company in the Oral care category. But off take in the recent years of key customers in this category has seen a decline, even though the China subsidiary holds its wallet share with them. With a view to restoring growth, the China subsidiary has been steadily expanding its innovation and technical capability for manufacture of high Value new generation laminated tubes catering to the Cosmetics, Pharma, Foods and niche premium Oral care categories. Coupled with strong customer marketing and development initiatives, the unit is establishing itself as a quality Supplier of non-oral care packaging solutions. The unit is also focusing on automation as a means to contain the operating cost escalation in the context of sharp increases in the wage cost. The strategy is working well and the unit growing again, having posted a high single digit sales growth and a double digit profit growth.

The Philippines unit continued to contribute to your Companys profits, with a large part of its sales and profit arising from non-oral care category.

The EAP Region has a track record of operational excellence and a strong balance sheet. With the non -oral care strategy gaining traction, the region is well poised to take share and grow in the large non oral care market in the Region.

CONSOLIDATED FINANCIAL PERFORMANCE OVERVIEW

Particulars FY ended 31 March 2019 FY ended 31 March 2018 Increase/ (Decrease)
Net Sales/lncome from operations excl excise duty 270693 242388 +11.7%
Profit from Operations before Other Income, Interest and Exceptional items 31535 30579 +3.1%
Finance Cost 6131 5502 -11.4%
Profit before tax and exceptional item 28553 26810 +6.5%
Net Profit for the year to equity holders 19253 17160 +12.2%

Sales growth at 11.7% was muted for reasons explained earlier; operating margin grew higher by 3.1%. Finance cost was higher by 11.4% due to key strategic capital expenditure. Profit before tax and exceptional items grew by 6.5% reflecting the above and further considering the change in the Other income and Exchange gain/(loss) compared to previous year. Net profit for the year is higher by 12.2% as comparted to previous year.

CREATIVITY AND INNOVATION (C&I)

The Research and Development (R&D) function (a.k.a. Creativity and Innovation within the Company) has been one of the key drivers of your Companys growth as a leading global player. Your Companys C&I Team have successfully amalgamated its deep knowledge of polymer science, conversion process and engineering to create Tubes with special features. Outcome is the best of aesthetics and functionality. C&I team brainstorm with market research group, customers and strategic partners to understand the evolving needs in the market place and develop new packaging solutions for reputed brands proactively. Your C&I team continually partner with customers in rolling out new products globally. A structured C&I process ensures that the innovation pipeline of the Company at all times is full, and contributes to the sales and profitability of your Company.

The C&I function intensely work on sustainability and continually launches environment-friendly tubes and process. Cross sections of the latest innovated products of your Company are presented in the Features section of the Annual Report. The R&D facility of your Company has been recognized and certified by the Department of Scientific & Industrial Research, Government of India.

Your Company continues to protect the enormous intellectual property which the C&I function is creating. In this regard, your Company has filed till date , as many as 154 patent applications in the different geographies in respect of the various inventions by its R&D, and has been granted 56 patents. To strengthen the capability of the R&D, additional resources have been inducted in the advanced scientific research and simulation lab.

Your Companys research and development efforts continue to win accolades in several forums and among customers across the globe.

TECHNOLOGY

Your Company always has seen Technology as a great enabler to deliver disruptive changes be it in the Product, Process, Equipment or Raw materials, as a means to create and sustain competitive edge at all times.

As Pharma continues to be one of the major focus segment for growth, we need to be ready with the regulatory approvals for supporting our customers to enable transition from Aluminium tubes to Lamitubes. We are happy to announce that this year your company has generated the data for our laminates confirming compliance to USP 661.2 (Plastic Packaging System for Pharmaceutical use). This compliance to global norms will provide a major boost for positioning lamitube in pharmaceutical packaging applications and also provides a unique differentiation in this space.

As you know, globally , sustainability is taking center stage, deciding the packaging formats across geographies. We are happy to say that your company continues to lead with new innovations in this arena providing newer options to our customers and other stakeholders. We have evaluated post-consumer resins (PCR) from newer sources and commercialized lamitube with upto 25% PCR usage in the tube sleeve and upto 50% PCR in the tube shoulders. We see an increasing use of PCR which indicates a positive trend for "Re-Use" and reduction in use of virgin plastics in making lamitubes. We also see new opportunities for increased business with Green Maple Leaf (GML), which promotes "Recycle" Concept and Super Titanium Webs which promote "Reduce" Concept.

Your company has taken significant strides in enabling recycling of Aluminium Based Lamitube with Project Liberty - which is our successful attempt to separate the aluminium of polymer components during the recycling process, enabling them to go to their respective streams for use. We see a lot of interest from our Customers and value chain partners to collaborate with us in this initiative and thereby meet their commitment on sustainability.

This year, your Company commissioned a new generation extrusion laminator in India. We conceptualized, designed and co-developed this laminator along with our technology partner. This high speed machines control systems use artificial intelligence and energy savers that reserve power for use in the "Regenerative mode" - a feature that sets it apart from all its counterparts - once again reinforcing our commitments towards "Green & Sustainable" initiatives to our stakeholders.

Your Company is now challenging itself on identifying bottleneck processes and technology that hinders the quick turn-around of the products to its Customers; therefore, actively working on forging strategic alliances to bring in solutions to the above challenges.

Your Company has now developed high speed on-line realtime quality inspection systems which will help assure the customers that every tube supplied by your company is defect free for direct use in their process. These systems are now being rolled out in a phased manner across the globe.

In some geography, we are facing challenges of availability of human resource. Getting people for the shop floor level is becoming more and more difficult in these geographies. We are in process of accelerating development and investment on technologies like automation and high speed equipment which will help in reducing dependence on human capital where availability of people is a challenge.

e-Commerce is causing new disruptions in the FMCG market place. Niche brands with global visibility through the web and social media and helped by e-logistics now compete with traditional brands. This has introduced new volatility in the off-take which in turn affects our capacity and supply chain for tubes. We are working on new technology to help us create flexibility based on the theory of constraints. With this we believe we can optimize our capacity utilization and improve our response time to the delight of our customers.

FINANCE

Robust operational performance, judicious capex spend, continuous measures to improve capital productivity account for your Companys healthy cash flows. Average interest rate increased by 28 bps due to hardening of interest rates globally. The increase would have been higher, but better negotiations helped to contain the same at this level. Prudent exchange risk management has helped exchange loss in the consolidated financial statement at 2.3 Crore. The consolidated net debt as at the end of FY 19 was 500 Crores, lower by 64 crores compared to previous year end, representing a healthy debt-equity ratio of 0.46 and a DSCR of 2.09. Company continues to enjoy CARE AA rating for its NCDs and various long term bank facilities and CARE A1+ rating for its short terms Bank facilities. The consolidated ROE and ROCE is at 14.6% and 17.4% respectively, as compared to 15.0% and 16.8% in March 2018.

HUMAN CAPITAL

Your company strongly believes that our people are our greatest assets. They give your company its unique competitive edge. As a global organization, your company comprises of a diverse mix of people from different educational, cultural and geographic backgrounds who bring their unique inherent strengths to the organization.

Your company recognizes and nurtures their strengths through a structured Talent Management process focused on capability building through customised Classroom Trainings, e-Learning, Executive Coaching and Cross functional/cross geographical action learning projects. The process also ensures continuous talent availability, through Job rotation. Job enlargement. Cadre building programs, leveraging talent in various geographies for global roles.

Your company is committed to continuously engaging its employees as a key driver for shareholder value creation. Customised Unit level and Manager level Employee engagement action plans have enabled your company to take up positive steps in this journey. These actions helped the company to take up the global Employee Engagement score to 71%. In order to ensure that employees across the globe are aligned with company goals and experience all people processes in a standard manner, your company uses EPRISM system a best in class software for Employee Lifecycle management. EPRISM brings all employees globally closer to each other and ensures information availability on theirfingertips. EPRISM also provides a forum for internal networking, plus it has advanced analytics ability and connects all "people processes" together to help organisation build internal capability and take holistic people decisions.

Your company also continues to put special emphasis on Employee Communication through Town halls, Leadership interactions and messages, newsletters and interesting competitions to ensure alignment with Companys Vision and Mission.

INFORMATION TECHNOLOGY (IT)

As your companys business is becoming more complex with increasing focus on Non Oral care revenue growth , which goes hand in hand with shorter product life cycles and smaller production runs, your company has defined an IT Vision and Mission statement that crystalizes how IT will enable business success by collaborating with each function in the organisation. IT Vision and Mission statements have been articulated as below:

IT Vision:

• Deliver sustainable innovative technology solutions enabling our business to;

• Simplify, automate and digitize processes; thereby

• Reduce turnaround time to meet customers demands; and

• Makeourorganisationfutureready

IT Mission: SPRINT -- Simplify, Predictive, Robust, Innovate, Nimble & Transform

• Simplify processes by Value stream mapping across all business functions to enhance efficacy and sustain our competitive edge

• Predictive approach via Data Mining techniques and driving Artificial Intelligence (Al) based decision making processes

• Robust, reliable and secure technology systems and infrastructure for seamless access to information

• Innovate & implement solutions that empowers and engages end users in productive manner

• Nimble & responsive service oriented architecture to deliver agile and cost efficient solutions

• Transform into knowledge based organisation via continual learning, IT skill upgrade and create knowledge-sharing platform

Your company is working on all facets of Mission SPRINT and some of key initiatives as explained below.

Your company continues to move on Digital Transformation journey by simplifying tasks and optimising the level of skills required for day-to-day activities as well as to maximise on the resources deployed. Your company has implemented on-line Document Management System (DMS) and Business Process Management (BPM) tools which have helped in automating various business related workflows.

Your company has completed implementation of Artwork and Graphic Management tool across all four geographies. This tool helps in digitizing the entire process of capturing customers print requirement and getting their approval online, thereby reducing cycle time and errors. Your company has embarked upon implementing AI based decision making solutions like Chat bots and predict the accuracy of Demand Forecast thereby strengthen our complete Supply Chain management processes. Your company has augmented and implemented warehouse management system tightly integrated with ERP in many of its units thereby further improving operational efficiency.

Given the proliferation of devices used for day-today transactions, Your company is ensuring that IT infrastructure is robust & secure by continuously evaluating, adopting and upgrading tools to ensure that the security of our end point devices (laptops/desktops) and servers is not breached and no data is compromised. This year we have completed Vulnerable Assessment and Penetration test (VAPT) which also involves ethical hacking of critical infrastructure. Your company continues to invest in state of art Disaster Recovery systems, redundant networking system and processes which ensure business continuity in case of any unforeseen events. Your company is working on transforming the organisation into knowledge based organisation by training employees on latest functionalities of ERP & increasing their IT skills. A Steering Committee comprising of the Corporate Leadership Team supervises the IT initiatives and IT effectiveness through regular monthly reviews.

INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY

Your Company has in place internal control systems and a structured internal audit process charged with the task of safeguarding the assets of your Company and ensuring reliability and accuracy of the accounting and other operational data. The internal audit department reports to the Audit Committee of the Board of Directors.

Your Company has a system of monthly review of business as a key operational control wherein the performance of units is reviewed against budgets and corrective action is initiated.

Your Company has in place a capital expenditure control system for authorizing spend on new assets and projects. Accountability is established for implementing the projects on time and within approved budget. This is overseen by the Investment Committee of the Corporate Leadership team.

Your Company deploys IT supported work flows in different areas as a way to enhance controls without compromising on speed and accountability.

The Audit Committee, the Statutory Auditors and the top management are regularly apprised of the internal audit findings, and regular updates provided at the Audit committee meetings of the Action taken on the internal audit reports. The Audit Committee of the Board consisting of non- executive independent Directors reviews the quarterly, half yearly and the annual financial statements of your Company. A detailed note on the functioning of the Audit Committee and of the other Committees of the Board forms part of the section on Corporate Governance in the Annual Report.

During the year, your Company carried out a detailed review of internal financial controls in the India units. The findings were satisfactory and suggestions for improvement have been taken up for implementation. Policy guidelines and SOPs continue to be updated where required to keep pace with business needs.

RISK MANAGEMENT

The Board of Directors and the Audit Committee of the Board review the business risks to which your Company is exposed and the various mitigation measures. The senior management team led by Chairman & Managing Director is responsible to manage risks pro-actively, developing and implementing appropriate mitigation measures.

Key risks to which your Company is exposed include:

a) Escalation in raw material prices and impact for long term contracts

• Your Company has incorporated raw material cost escalation pass through clauses in its customer contracts which enable the product prices to be revised periodically to reflect any variation in material costs.

• Where possible, your Company continues to identify and establish alternate supply sources and/ or alternative materials in order to effectively manage the material costs as well as supply continuity.

b) Single Product dependency

• Being an essential consumer product and an item of daily use, tooth paste as a category still dominates your Companys product range albeit to a much lesser extent than before. However, it also tends to have a stable demand during adverse economic environment. Your Companys engagement with all major brands in this category further fortifies its position.

• Your Company now has over 40% of its revenue coming from cosmetics, food and pharma categories which is making for a diversified portfolio in terms of customers and application categories.

• Tube as a packaging format is being increasingly preferred for products in paste/gel/cream and even viscous liquid form for reasons of ease of dispensing, convenience, resource reduction, capability for branding and decoration. Here too, Laminated Tubes are being increasingly sought after by FMCG brands compared to plastic and aluminum tubes.

• Scale, technology, integrated manufacturing process, innovation capability, operational efficiencies are other factors which further strengthen your Companys competitiveness in the tubes space, as well its ability to work as global partner for large multi-national customers including local brands in each geography.

c) Attracting and retaining talent

As with any other business, high demand for talent globally impacts employee turnover. Your Company addresses this to the best possible extent by being an empowering organization with professional management culture and maintaining a lean structure. Contemporary HR practices such as career planning, competitive remuneration, performance management system, performance linked pay, stock options, skills and competency training are now well established across the Company and its subsidiaries. Top talent is given the opportunity to move across functions and geographies. Employee engagement survey is carried out annually and the findings are used to further improve employee satisfaction.

d) Currency volatility

The global nature of operations exposes the Company to multiple currencies; fluctuations in exchange rates could affect your Companys performance. Appropriate pass through clauses have been built into long term customer contracts in order to offset the impact on material cost due to exchange rate fluctuations. Prices get reviewed and revised in the event of significant currency movements. Your Company also has the policy of systematically hedging its trade and capital exposures using forward contracts. Wherever possible transactional currencies are aligned to the reporting currency in order to obviate exchange fluctuation impact.

e) Economic downturn

This could impact your Companys markets, suppliers, customers and finances leading to business slow down, disruptions etc.

• Your Companys products are linked to daily necessities of the consumers and their demand generally is not much impacted by the downturn.

• Your Company pro-actively monitors the emerging trends in consumption and offers relevant solutions to its customers so as to stay ahead of the curve.

• Your Company also is focused on containing costs and improving efficiencies as a means to stay competitive.

• Proactive supplier and customer engagement is another way your Company seeks to minimize risk to business continuity.

f) Competition

This could put pressure on volume growth and pricing. Your Company focuses on superior quality, shorter lead time and high service level as means to keep the customer satisfaction high. It also invests in technology driven innovation, Sustainability driven products/ process to sustain its competitive edge. Besides, its ability to support the customer across the globe and focus on efficiency and value management help to sustain its position as a world-class provider of packaging solution.

g) Wage increases in the developing markets

This could impact costs and margins. Your Company is pro-actively using automation and asset productivity improvement as a means to contain the headcount and manage employee costs.

OUTLOOK

Your Company is on track with strategy implementation. The non-oral care category globally holds much growth potential for your Company over next few years by replacing plastic/ aluminum tubes and bottles with new generation laminated tubes. Added to that. Technology/ Sustainability innovations such as Mystik, Green Maple Leaf, Etain etc. have the potential to open up new opportunities, brands and customers going forward. Extensive customer engagement and focused business development efforts have made your Company a well regarded packaging solution provider for non-oral care brands globally. The performance in the recent years of your Companys business is an ample evidence of this. There are a number of initiatives under way for deploying technology to elevate customer experience of our products and service. With its large scale, global presence, innovation capability, technology focus and a motivated Human capital, your Company is well set to deliver on the task of delighting all its stakeholders.

SIGNIFICANT CHANGE OF KEY FINANCIAL RATIOS:

There is no significant change in key financial ratios as compared to the ratios of previous financial year.

CHANGE IN RETURN ON NET WORTH

The return on Net worth for the financial year 2018-19 has gone down marginally by about 0.4% to 14.6% as compared to preceding financial year return of 15% on account of lower profitability in India during the year.

MEDIUM AND LONG TERM STRATEGY

With a view to FY 2021-22, your company will continue its focus on strategy of Mission 20:20:20 (i.e. 20 % EBDITA margin , 20% ROCE and 20% ROE) , whereby targeting Non oral care revenue share of 50% and Revenue growth 15% CAGR and PAT growth of 20% CAGR.

CAUTIONARY STATEMENT

Statements in this Annual report, particularly those which relate to management discussion and analysis, describing your Companys objectives, projections, estimates and expectations may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual results may materially differ from those expressed or implied.