Nahar Polyfilms Ltd Management Discussions.


The Global Economy faced several challenges last year ranging from slackness in demand, trade dispute between U.S.A. and China and other Geo Political uncertainty which slowdown the Global trade. The outbreak of COVID-19, a global pandemic further impacted the economic, social and financial structures of the whole world. The World Economic Outlook says that the global economy is projected to contract sharply by 3% in 2020, which is much worse than during the 2008-09 financial crises.

In India too, the economic implications of the COVID-19 pandemic are far reaching and has caused significant disturbance and slowdown of economic activity. The economic impact of this pandemic is much more as it has drastically altered the outlook for growth for year 2020-21. As per RBI Monetary Policy, the global economy is expected to slump into recession in 2020. The Government is taking steps to meet the challenges caused by the COVID-19 pandemic. It is expected that the policies measures taken by the Government will definitely provide the much needed support to the Indian economy.


Flexible packaging industry has emerged as one of the most popular packaging type in the world over a period of time. It is experiencing growth globally as a result of higher focus and preference of consumers towards hygiene and packaged food products. The demand for flexible packaging is expected to increase post COVID-19 pandemic. Currently, flexible packaging is the most popular type among other packaging types. Several technical and economic factors have made the flexible packaging industry as one of the most dynamic sector. Increase in consumer awareness, demand for quality goods, boom in e-commerce and organized retail is expected to enhance the growth of flexible packaging.

Flexible packaging offers various advantages such as high barrier properties, film stiffness, transparency, salability, recyclability, good printing and coating which makes it highly suitable for the packaging of various products which includes biscuits, drugs, medicines, snack foods, processed and semi-processed foods, vegetables, edible oils, textile packaging etc and also for the wrapping of perfume cartoons, ready-made garment bags, adhesive tapes and print lamination. The online procurement has gone up with surge in flexible packaging. The global food packaging market reached a value of USD 302.20 Billion in 2019. The Indias Packaging market was valued at USD 50.50 Billion in 2019 and is expected to reach USD 204.81 Billion by 2025, registering a CAGR of 26.7% during the period of 2020-2025. (Source: Report Linker).

Your Company is having an ultra modern BOPP Film Plant with a capacity of 30000 TPA, in the state of Madhya Pradesh and is selling its products in domestic as well as export markets. The Company has established its brand in the market. We are pleased to inform that the Company has decided to go for expansion of its BOPP plant with the capacity of 30,000 M.T. at a capital outlay of around Rs. 260 Crores which will be funded through internal accruals and Term Loan from banks. After the implementation of the said project, the total capacity of BOPP plant will stand increase to 60,000 M.T. The order for the machineries has been placed. The construction work of the plant is in full string. The machinery will start arriving from February, 2021 onwards. It is expected that with this addition, company will be able to produce more quality products at low cost of production.


The growing demand for packaged food across the globe has propelled the need for BOPP films for packaging. As consumers across the globe are constantly gaining awareness regarding the way food products are packed, the demand for cost-effective and advanced packaging is increasing at a rapid pace. Growing consumer awareness regarding packaging, coupled with a shift in the preference for flexible packaging solutions is anticipated to catapult the demand for flexible packaging.

BOPP films have equivalent density that of Polypropylene. It is a preferred material in packaging that generates high yield and more cost effective than other substrates of packaging. Additionally, the rising demand for an enhanced shelf life of food products has resulted in a greater demand for high moisture barriers in packaging films. This is further projected to boost sales of BOPP films for packaging in the coming years.

Apart from conventional Tape/Textile and food packaging market, the new applications of BOPP films are emerging which will further improve the prospectus of the industry. The enormous untapped market for BOPP Films in emerging economies is also expected to offer growth opportunities to BOPP film Industry.

Though the BOPP Films industry continues to witness a reasonable growth on account of favorable factors but it is not immune from normal business threats and challenges. Because of the competitive plastic films, Industry faces stiff competition both from international as well as domestic manufactures. The Company has identified certain risks which may affect the performance of the Company. These include operational risks such as fluctuation in the prices of the raw materials which include crude, fluctuation in foreign exchange rates, regulatory risks, Government Policy etc. We are of the opinion that none of identified risk is such that which may threaten the existence of the Company.


The outbreak of Corona virus disease (COVID-19), a Global Pandemic has significantly impacted the Social and Economic activity. The Indian Government declared a complete lockdown from 23 March, 2020 to 31 May, 2020 to combat the spread and transmission of virus and in compliance with the lockdown instructions issued by the Centre and State governments, the company temporarily suspended operations. However, the Government allowed some essential industries to operate and after seeking necessary approvals / permissions from the Government Authorities, the Company resumed its operations in April, 2020. The situation is still not clear and changing dynamically. The management is making continuous efforts to assess and minimise the impact of COVID-19 on business operations.


The disclosure requirements of Ind AS-108, issued by the Institute of Chartered Accountants of India are not applicable on the company as the main business activity of the company fall under single segment.


We anticipate that in coming years the BOPP Films industry seems to show reasonably good growth in comparison to the previous years. The phenomenal growth of retail segment coupled with economic growth of the Country is expected to influence the flexible packaging industry favorably. With the coming of new segment of liquid packing which includes flexible pouches, tetra packs, coated products etc, the company finds new business opportunities to grow. Your company is looking at the future with optimism and shall be expanding its business activities into new areas, in due course of time so that it can make use of available opportunities and emerge as fully integrated flexible packaging company. Around 50% of the worlds production of BOPP is consumed in food packaging. In India, the consumption of BOPP in food packaging is only one third of its production. This gap is rapidly being bridged as the customers are increasingly displaying a strong preference for hygienically packed foods products.

In addition to the above, the application of the BOPP Films in other Non-food packaging is also gaining strength which will further boost the demand for BOPP Films. Numerous grades of BOPP films are under development for various applications in different parts of the world which should give good volumes to the Industry. Thus, it is evident that BOPP films are going to be one of the high-growth segments in the global plastic films and sheet industry.


The major component of cost involved in the making of flexible packaging is raw material "Polypropylene". Any changes in the raw material prices and decrease in finished good product prices may affect the performance of the company. Though the Company has endeavored to monitor and mitigate these risks.

The companys main source of income will be from selling of BOPP film, a substrate in packaging material in plain and metalized form to further converters. Any adverse impact on the operations of the packaging converters may impact the companys revenues and its profitability. The increase in demand for newer options in packaging is also affecting the growth of BOPP films industry.


The companys Internal Control system is designed to ensure operational efficiency, protection and conservation of resources, accuracy and promptness in financial reporting and compliance with procedures, laws and regulations. It commensurate with the size and nature of business. In order to further strengthen the Internal Control system and to automate the various processes of the business, company is making use of Enterprises Resource Planning (ERP).

Pursuant to the provisions of section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the Company has also appointed an Internal Auditor who is a qualified Chartered Accountant. The details relating to Internal Financial Control system have been given in Directors Report and forms part of this Annual Report.


The outbreak of COVID19 has not significantly impacted the operations of the company.

(Rs. in Lakhs)

Profit Before Tax 4453.62 1292.27 4354.45 1193.10
Profit for the Year 3289.66 910.72 3727.58* 1222.78*
Add: Other comprehensive Income/(Loss) (5041.23) (465.85) (10251.43) (1008.35)
Total Comprehensive Income/(Loss) for the year (1751.57) 444.87 (6523.85) 214.43


*Consolidated profit for the year includes Share of profit from Associates under equity method for the amount of Rs. 537.09 Lakhs in Current Year and Rs. 411.23 Lakhs in the Previous Year.

The Company is operating in single segment i.e. BOPP Films. The company has showed impressive financial performance over the period of one year. There is an increase of 261.22% in net profits of the company for the year ended 31 March, 2020 as compared to the net profits for the year ended 31 March, 2019. The detailed financial performance (Standalone as well as Consolidated) have been given in the Directors report and forms part of this Annual Report.


Your company considers its employee as its biggest asset. The human resources development function of the Company is guided by a strong set of values and policies. Your Company maintains a work environment that is free from any harassment. Company enjoys excellent relationship with its personnel and considers them as an essential part of the organization. Your company maintained healthy, cordial and harmonious industrial relations at all levels. In Financial Year 2019-20, industrial relations across the Company were cordial with not a day lost due to labor unrests or strikes during the year.

In this time of pandemic, the Company has taken various measures to take care of the livelihoods of workers, their safety and security. The steps include providing masks, hand sanitizers, disinfectants, conducting regular temperature checks and being very vigilant on workers and essential visitors at our operational facilities. The Company has also emphasised on providing medical facilities to workers inside the factory premises, and sanitization and fumigation in the whole factory. The total permanent employees strength of the company was 184 as on 31 March, 2020.


Ratio 31.03.2020 31.03.2019
Gross Profit Ratio 21.17 11.02
Net Profit Ratio 16.06 4.86
Interest Coverage Ratio 165.46 17.22
Current Ratio 5.52 4.30
Debt Equity Ratio 0.00 0.00
Return on Net Worth 25.25 6.61

Gross Profit ratio, Net Profit ratio and Return on Net Worth have been increased. The price of commodity in which the company is dealing is based on international crude prices. Since, the price of crude is volatile. It is normal for the company to have a variance in Gross profit or net profit margin as sometimes the effect of increase / reduction of prices of inputs are not fully transferred to the customers due to prevailing market conditions. The company has very less amount of loans. So, its impact on Debt Equity ratio is negligible. The Company has earned cash profit of Rs. 35.10 crores which is mainly used for reduction of short term liabilities & increase in current assets, which leads to an improvement in current ratio. The earnings of company utilized for reduction of working capital limits during the financial year 2019-20, therefore less interest charged by banks which leads to increase in interest coverage ratio.


Statements in this report on Management discussion and analysis relating to the Companys objectives, opportunities, estimates, expectations or predictions may be forward looking statements within the meaning of applicable security laws or regulations. These statements are based upon certain assumptions and expectations of future events. Actual results may however differ materially from those expressed or implied.

DATED: 12 AUGUST, 2020 DIN: 00463866