G K P Printing & Packaging Ltd Management Discussions.



The outbreak of COVID-19 pandemic in March 2020 led to an uncertain operating environment with stringent lockdown measures across the country severely disrupting economic activities. This compelled the Company and many of its customers to temporarily halt or scale down operations, resulting in decreased revenues in the first half of the year. As the country moved into unlocked phases, there was a steady pick-up in the overall economy. While operations were promptly resumed, the initial loss was covered up with subsequent months, resulting in positive revenue increase for the year.

During the unprecedented times, the Company undertook all necessary measures to ensure safety and well-being of its employees, business partners, communities and to safeguard the interests of its customers to the best possible extent.


The global packaging industry market size continues to grow mainly driven by the increasing demand from end-user sectors such as FMCG, Food and Beverage, Retail, E-Commerce and Healthcare industries. The Asia Pacific region remains the biggest packaging consumers.

Over the past few years, India has maintained its position as one of the fastest growing consumers of packaging solutions in the world on the back of expanding domestic consumption. The onset of COVID-19 pandemic in March 2020 however impacted the growth of certain underlying industries that in-turn affected demand for the packaging industry. Looking ahead, rising young population, growing income levels, changing lifestyles are expected to drive consumption across various industries leading to higher demand for the packaging solutions, including the sustainable paperboard-based carton and flexible packaging segment.

Given the environmental impact of certain packaging materials, consumers world-wide are becoming very sensitive. Accordingly, companies are looking towards opportunities to become more eco-friendly and adopt sustainable packaging solutions. The emergence of green packaging solutions is a key trend to watch in the current decade.


In the financial year 2020-21, G. K. P. Printing & Packaging Limited delivered a healthy performance achieving a robust turnover of Rs. 2,926.59 Lakhs, up by 9.90 % year on year basis. The total revenue including other income for the year has been Rs. 2,946.71 Lakhs as compared to Rs. 2,686.46 Lakhs in the previous year. During the year, the Company earned Net Profit of Rs. 78.04 Lakhs as compared to Rs. 76.18 Lakhs in Previous Year.


India corrugated box market is highly fragmented with the presence of around 18,000 organized and unorganized players. There are no regulations in the market regarding the entry of the players and since it is a low capital intensive business so many new players are entering in the market.


The Company is engaged into production of Corrugated Boxes. Our product Corrugated boxes is mainly used in the packaging industry. Our customers decision to seek alternative technology coupled with the development of more alternatives and our inability to respond to these changes may adversely affect our business and results of operations. Our products are mainly sold to customers operating in FMCG, Garments, Liquor, etc. thus any slowdown in this sector may adversely affect our business operations. Our ability to anticipate changes in technology and to supply new and enhanced products successfully and on a timely basis will be a significant factor in our ability to grow and to remain competitive. In addition, our business, operations and prospects may be affected by various policies and statutory and regulatory requirements and developments that affect our customers industry in India. In the event of a significant decline in the demand for our products, our business, results of operations and financial condition may be materially and adversely affected.


The onset of COVID-19 led to strict social distancing and sanitization norms that increased costs for the Company. This led to significant work done on cost-cutting and curtailing expenditure on all fronts. As the macro-economic situation improves, these measures should benefit the Company in the long run.

The overall long term macro-economic conditions in India are expected to improve considering the continuing stable Government at the Centre. With a diverse geographical presence across India, G. K. P. Printing & Packaging Limited fulfills the requirements of its customers for both carton and flexible packaging, giving your Company a competitive advantage. Also, considering a sizeable quantity of unutilized capacity, an improvement in the market scenario will translate into high growth prospects for the coming year without much additional investment.


The COVID-19 pandemic remains a threat to the Companys operations. The pace of vaccination as well as the effectiveness of hygiene practices will play a part in determining the future impact of this pandemic. Additionally, in the past few months, there are significant and unprecedented increases in costs of not only raw materials but also operating expenses, putting pressure on margins. Globally, prices for the main raw materials of the paper and plastics industries have increased notably. Key chemicals and metal prices have also increased substantially.

Whilst the Company tries to pass this on to customers and absorb some of it by improving productivity, there is still a threat of lag that may impact margins. One of the risks for the Company includes growth of the underlying end-user industries such as Food & Beverage, chemicals, glassware, ceramics, paper, electronics, textiles, personal care and household products.


The need for environmentally clean and safe operations is companys key priority. The Company policy requires the conduct of all operations in such a manner so as to ensure the Safety of all concerned, compliance of statutory and industrial requirements for environment protection and conservation of natural resources to the extent possible.


The Company has implemented proper system for safeguarding the operations/ business of the Company, through which the assets are verified and frauds, errors are reduced and accounts, information connected to it are maintained such, so as to timely completion of the statements. The Company has adequate systems of Internal Controls commensurate with its size and operations to ensure orderly and efficient conduct of business. These controls ensure safeguarding of assets, reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely preparation of reliable financial information. The Audit Committee of Board of Directors reviews the efficiency and effectiveness of internal control systems and suggests the solution to improve and strengthen. The Internal control system were tested during the year and no material weakness in design or operation were observed.

The requirement of having internal auditor compulsory by statue in case of listed and other classes of companies as prescribed shall further strengthen the internal control measures of Company.


The Company had cordial and harmonious industrial relations at all levels of organizations. The company believes that the industry has the tremendous potential to impact the society, nation and the world positively. Its employees are major stakeholders and their efforts have direct stake in the business prospectus of the organization. The employees have extended a very productive cooperation in the efforts of the management to carry the company to greater heights. The company considers employees as their biggest competitive advantages. The Company takes initiative like training and development for its people to increase the performance. The Company has taken various steps to improve and enhance skill of its people. The industrial relations remained cordial in our plant. The Company has continued to give special attention to human resources and overall development.


Certain Statement made in this report describing Companys Objective, Projects, estimates and expectations may be forward looking statement within the applicable laws and regulations. Actual results may differ from such expectations and forwards looking statement due to various risk and uncertainties. Several factors affecting companys operation like economic conditions affecting demand and supply, Government regulations and Tax Laws, Competitions prevailing at the relevant time, natural calamities etc. The Company assumes no responsibility to publicly amend, modify or revise any of these statements on the basis of any subsequent developments, information or events.


The Key Financial Ratio during the financial year 2020-21 vis-a-vis Financial Year 2019-20 are as below:-

Particulars 2020-21 2019-20
Debtors Turnover 1.70 2.24
Inventory Turnover 14.37 24.56
Current Ratio 3.22 4.66
Interest Coverage Ratio 5.57 47.86
Operating Profit Margin 8.57 9.36
Net Profit Margin 2.67 2.86
Return on Net Worth 3.59 3.63