Paramount Printpackaging Ltd Management Discussions

INDUSTRY STRUCTURE & DEVELOPMENT

Packaging plays a very distinct role in todays modern consumerist economy with the need for widespread adoption of branding and development of consumer preferences. Any manufactured item, to gain market share, requires packaging to ensure safety, convenience and attractiveness. Packaging is a key component for consumption and consumer preferences in todays economy. Packaging helps in preservation of quality and lengthening shelf life of products such as milk, biscuits, drugs, processed and semi-processed foods, fruits and vegetables, edible oils, etc. Packaging is also required for most other manufactured goods to preserve it from any damage during transit. The packaging industry has evolved over the years from a relatively small range of heavy, rigid containers made of wood, glass and steel to a broad array of rigid, semi rigid and flexible packaging options increasingly made from specialized lightweight materials. The packaging industrys growth has also led to greater specialization and sophistication from the point of view of health (in the case of packaged foods and medicines) and environment friendliness of packing material. The demands on the packaging industry are challenging, given the increasing environmental awareness among communities.

KEY DRIVERS AND TRENDS

• Ageing of world population;

Trend towards smaller and nuclear households Increasing trend towards convenience and quick access among consumers;

• Rising health awareness among consumers;

• Trend towards on-the-go lifestyles among increasingly time-poor consumers;

• Growing requirements for brand enhancement/ differentiation in an increasingly competitive consumer environment;

• New technology and modern packaging material;

• Increasing awareness of environmental issues and the adoption of new regulatory requirements on packaging recycling.

OPPORTUNITIES & THREATS

The Company has benefited from the experience of its Promoters and the core management team. We believe that our Promoters have built a strong relationship with both the suppliers and the customers in the industry. The Companys core strength lies in the extensive knowledge of its core management team which helps the Company to execute the growth strategies. Most of the key managerial personnel have substantial experience in their respective fields. The Company believes that having a strong management team with extensive experience enables it to respond to changing market conditions and tune it to the preferences of the customers for its overall success and future growth. The Companys large customer base gives it strength and support for future expansion and growth. In last few years, the client base has been diversified geographically and sector-wise. It caters to various sectors like pharma, auto ancillary, FMCG, electrical, food etc. The progression of demand in the packaging industry is influenced by a wide range of factors and includes both year on year short term factors and other long term factors. Like any other industry, while the economy plays a central role in influencing the size and growth of the market, there is a multitude of other factors which can be seen as having a direct or at least an indirect influence on the demand in the packaging industry, irrespective of the performance of the economy.

RISKS AND CONCERNS

Your company does not perceive any risk or concern other than those that are common to the industry such as regulatory risks, exchange risk and other commercial and business related risks.

a) Operating Results

During the year, the Company has net revenue from operations of Nil against 115.90 lacs in the previous years and as such there is a loss of 77.16 lacs as against the loss of 282.20 lacs in the previous year.

b) Resource Utilisation

The gross fixed assets as at 31.03.2016 were 3826.50 lacs as compared to3826.50 lacs in the previous year. During the year there is no increase in the assets of the Company.

c) Working Capital

Net working capital including cash and bank balances as on 31.03.2016 was (4024.97)lacs. Book debts outstanding for a period exceeding six months from the date they were due for payment as on 31.03.2016 and in the previous year stood at Nil and 51.31lacs respectively.

Internal Control Systems

The Company has got its own system of internal controls to ensure that all assets are safeguarded, and protected against loss from unauthorised use or disposition, and that transactions are authorised, recorded and reported correctly. The internal control systems are supplemented by internal audits, reviews by management, and documented policies, guidelines and procedures. The internal control systems are designed to ensure that the financial and other records are reliable for preparing financial statements and other data, and for maintaining accountability of assets.

Material Development in Human Resources / Industrial Relations:

Company hires the best talent from anywhere in the country that it needs for its services. The Company has well designed training programme to take care of the training needs of the professionals to keep them abreast of the new technological changes. The Company enjoys healthy relations with its customers, investors, employees, banks, and various state and central government departments. To offer the most cost-effective solutions to the overseas existing clients and also to capture new clients, the Company also recruits highly skilled technical persons from reputed institutes.

Cautionary Statement

Statements in the Management Discussion and Analysis describing the Companys objectives, projections estimates, and exceptions may be "forward looking statements" within the meaning of applicable laws and regulations. These statements are based on certain assumptions and expectations of future events. Actual results may differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand/ supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and other incidental factors. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.