g k p printing packaging ltd Management discussions

I. INDUSTRY STRUCTURE AND DEVELOPMENT:

The global packaging business has experienced consistent growth over the last decade due to substrate choice changes, expansion of new markets, and changing ownership dynamics. Sustainability and environmental issues may continue to be emphasized, particularly in developed regions, and various innovations catering to paper and plastic packaging are witnessing in the market.

The size of the global packaging industry will increase almost 170.61 billion between 20222023, accelerating at a CAGR of 4% during the forecast period. This growth in market size will be attributed to massive demand from the e-commerce transport and shipment, food and beverage, personal care, household care, and healthcare industries for convenience- based packaging.

The packaging industry is anticipated to at a significant CAGR during the forecast period. The advancement in packaging technology to make the product more lucrative for the customers is a key factor contributing to the growth of the packaging industry across the globe. Technological advancement in packaging solutions, adoption of eco-friendly packaging, and huge R&D investment to develop new and innovative packaging solutions are the other factors driving the market growth across the globe.

II. FINANCIAL PERFORMANCE:

In the financial year 2022-23, G. K. P. Printing & Packaging Limited delivered a healthy performance achieving a turnover of Rs. 5607.08 Lakhs, up by 5.01 % year on year basis. The total revenue including other income for the year has been Rs. 5619.68 Lakhs as compared to Rs. 5359.52 Lakhs in the previous year. During the year, the Company earned Net Profit of Rs. 85.90 Lakhs as compared to Rs. 81.07 Lakhs in Previous Year.

ill. OUTLOOK:

We have progressively leveraged product quality assurance and good trade practices to trade in higher value products, expanding capacities to optimal scale. The Company has placed a greater focus on better value-added chemical storage and delivering process. Comparative low labour costs, excellent army of technical manpower, capabilities to scale up technologies, potential to increase share in undeveloped domestic and global markets shall empower your companys Speciality Chemicals growth.

Before the pandemic outbreak, the Company embarked upon a proper online payment facility at all its regional offices. This initiative will help company to reduce customer visit to the business place. Company has also adopted online brochure-based promotion; which help customers to choose the ideal product from their home itself. Company has planned several measures to mitigate risk of increase in inventory cost, material handling charges and for reducing risk of bad debts. The company is having good solvency position and a viable outlook to pay its long term and short-term debts and other finance cost. The company continues a good financial discipline by timely payment of interest and its liabilities.

With the increase of government support and initiatives to promote Micro, Small and Medium Enterprises through investments, tax benefits, subsidies etc. will help the industry to grow over the coming years. The Company always strives to cater to the customized demand and main focus is to cater the need of the Textile and Garments Industry, Dyes Industry, Pigments Industry and your company has achieved target revenues with high level of customer satisfaction. With very robust demand for companys products, Company has potential for adding capacities in coming period.

iv. COMPETITIVE LANDSCAPE:

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.

v. OPPORTUNITIES AND THREATS:

The Company has been continuously striving to keep its costs to minimum possible to aggressively compete with Indian & global competitors. Moreover, slowly India is getting competitive with respect to global manufacturers, as global environmental rules are becoming stringent like that of India. With a diverse geographical presence across India, G. K. P. Printing & Packaging Limited fulfils the requirements of its customers for both carton and flexible packaging, giving your Company a competitive advantage.

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.

VI. SEGMENT REVIEW AND ANALYSIS:

The Company is engaged into production of Corrugated Boxes. Our product Corrugated boxes is mainly used in the packaging industry. Ourcustomers 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.

VII. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has a well-established and comprehensive internal control system and structure across the value chain to ensure that its assets are safeguarded, transactions are authorized, recorded and reported correctly and operations are conducted in an efficient and cost-effective manner. In order to ensure orderly and efficient conduct of business the company has put in place systems which include policies and procedures, IT systems, delegation of authority, segregation of duties, internal audit by Third party and review framework etc.

VIII. DEVELOPMENT IN HUMAN RESOURCES:

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.

ix. SIGNIFICANT CHANGES IN KEY FINANCIAL RATIO AND RETURN ON NET WORTH:

The Key Financial Ratio during the financial year 2022-23 vis-a-vis Financial Year 2021-22 are as below:-

Particulars	2022-23	2021-22
Debtors Turnover	2.45	2.56
Inventory Turnover	8.95	12.99
Current Ratio	2.46	2.30
Interest Coverage Ratio	12.50	9.92
Operating Profit Margin	2.39	2.37
Net Profit Margin	1.53	1.52
Return on Net Worth	4.36	5.63