National Plastic Technologies Ltd Management Discussions.

The Management Discussion and Analysis Report sets out developments in the business environment and the Companys performance. The analysis supplements the Boards Report, which forms part of this Annual Report.

Economy Overview

India is the one of the fastest growing economies in terms of GDP growth having a growth rate of 6.8 % for the year 2018-19. Despite the near term challenges, the long-term outlook for the Indian economy is promising. This provides a lot of opportunities for industries to expand.

Plastics Industry Scenario and Development

The Indian Plastics Industry has registered good growth over the last few years. The Industry makes significant contribution to economic development and growth of various key sectors in the country like Consumer Durables, Automotive, FMCG etc. The Industry is expected to touch the turnover of Rs.5 Lakh Cr mark by 2025 from existing size of Rs.2.25 Lakh Cr and employ around 6 million people to become one of the largest employers in India. Further, Government initiatives are opening up opportunities for accelerated growth in the Plastics Industry. Rapid urbanisation, increase in sale of packaged products through retail and e-commerce mode, low per capita consumption, shifting consumer lifestyles, large young population, many manufacturing segments adopting higher percentage of plastics, etc are contributing towards the growth of Plastics Industry.

The Indian Consumer Durable Industry

India is one of the largest Consumer Durables market and has registered very good growth in recent years. The Industry is expected to grow at a steady pace which augurs well for plastic parts manufacturers like us who cater to this Industry. Urban markets account for the major share of total revenues in the Consumer Durables sector in India. There is a lot of scope for growth from rural markets with consumption expected to grow in these areas as penetration of brands increases. Also, demand for Durables like refrigerators, washing machines, etc are likely to witness growing demand in the coming years, especially in the rural markets.

The Indian Auto Component Industry

Indian Automotive Component Industry has grown at a steady rate on the back of good demand for automobiles. In spite of the near term challenges faced by the Auto Industry, the long term outlook is robust due to low level of vehicle penetration, rising incomes and aspirations of the Indian consumer, wide availability of vehicle models at different price points, inadequate public transport and greater focus of OEMs on the under penetrated rural and semi-urban markets.

Company Overview & State of Affairs

Usage of plastic products in Automotive and Consumer Durable industries is rising due to its advantages in designing cost reduction and weight reduction. Further, the Industry itself is growing at a good pace thus creating opportunities for the Company. The Company is predominantly into manufacture of products for Automotive and Consumer Durable industries and is already a major supplier of plastic products to the above mentioned industries. The Company is well positioned to capitalize on the opportunities over the next few years. The financial performance of the Company is discussed in the Boards Report.

Opportunities and Threats

While the rise in demand is an opportunity for the Industry, increased competition in the processing sector and fragmented nature of the plastic processing units are a threat to the Company.

Business Outlook

Current low per capita consumption level of plastic products as compared to developed countries suggests that India offers a huge opportunity over long term. Company has ample opportunities to grow by producing more products to meet the demand and achieve growth. The Company operates in only one business segment namely Moulded Plastic Products.

Risks and Concerns

Risks are adequately measured, estimated and controlled based on the type of risk or the activity that creates it. The Companys fundamental approach to risk management is to identify, measure and reduce risks through knowledge of the business.

Internal control systems and their adequacy

The Company has designed and implemented a process driven framework for internal financial controls within the meaning of the explanation to Section 134(5)(e) of the Companies Act, 2013 and the necessary control systems considering the business requirements, scale of operations and applicable statutes are in place in the organisation. The system includes the policies and procedures, delegation of authority, internal checks, segregation of duties, internal audit, review framework, etc. The Company has designed the necessary internal financial controls and systems with regard to adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, to maintain accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

Cautionary Statement

Statement made herein describing the Companys expectations or projections are "Forward looking statements". The actual results may differ materially from those expected or forecast depending on market conditions, input costs, economic development, Government policies and other external factors.