MANAGEMENT DISCUSSION AND ANALYSIS REPORT
1. INDUSTRY STRUCTURE AND DEVLOPEMENT:
In Indias case, packaging is the fifth largest sector in its economy and is one of the
highest growth sectors in the country. According to the Packaging Industry Association of
India (PIAI), the sector is growing at CAGR 22% to 25%. Over the last few years, packaging
industry has been an important sector driving technology and innovation growth in the
country and adding value to the various manufacturing sectors including agriculture and
FMCG segments. According to the Indian Institute of Packaging (IIP), the packaging
consumption in India has increased 200% in the past decade, rising from 4.3 kg per person
per annum (pppa) to 8.6 kg pppa as on FY20. Even with this steep rise in the last decade,
there is significant headroom for growth in this sector when compared to other developed
regions across the globe.
The India Packaging Market was valued at USD 50.5 billion in 2019, and it is expected
to reach USD 204.81 billion by 2025, registering a CAGR of 26.7% during the period of
2020-2025. Packaging is among the high growth industries in India and developing at 22-25%
per annum and becoming a preferred hub for packaging industry. Currently the 5th largest
sector of Indias economy, the industry has reported steady growth over past several years
and shows high potential for much expansion, particularly in the export market. Costs of
processing and packaging food can be up to 40% lower than parts of Europe which, combined
with Indias resources of skilled labour, make it an attractive venue for investment. A
high degree of potential exists for almost all user segments which are expanding
appreciably - processed foods, hard and soft drinks, fruit and marine products.
2. OPPORTUNITIES AND OUTLOOK:
The Indian packaging industry has made a mark with its exports that comprise flattened
cans, printed sheets and components, crown cork, lug caps, plastic film laminates, craft
paper, paper board and packaging machinery, while the imports include tinplate, coating
and lining compounds and others. In India, the fastest growing packaging segments are
laminates and flexible packaging, especially PET and woven sacks. Over the last few years
Packaging Industry is an important sector driving technology and innovation growth in the
country and adding value to the various manufacturing sectors including agriculture and
FMCG segments. The global packaging industry is developing and expanding day by day and
Indian packaging industry is also growing rapidly. This growth is primarily driven by
factors like growing pharmaceutical, food processing, manufacturing industry, FMCG,
healthcare sector and ancillary in the emerging economies like China, India, Brazil,
Russia and few other East European countries.
As plastics possess versatile properties it can help us do more with less. One such
property is light weight. As plastics are light in weight, they have a high product to
package ratio which results in lighter weighed end product. For eg: Only 1.5 pounds of
flexible plastics can deliver ~60 pounds of beverage; compared to three pounds of
aluminium or 50 pounds of glass. Thus, plastic packaging enables in shipping more products
with less packaging material. And also brings down the fuel consumption and the overall
transportation cost. Besides this, plastics can be reused and recycled. They have low
energy requirements during production, hence considered to be energy efficient. They
consume ~25% less energy in production compared to other alternatives. They result in
lower emission of CO2 gas. Thus when compared to glass or aluminium plastics results in
lighter environmental footprint.
3. RISK, CONCERNS AND THREATS:
Our success depends on the supply and transport of the various raw materials required
for our manufacturing facilities and of our finished products from our manufacturing
facilities to our customers and distributors, which are subject to various uncertainties
and risks. We use third- party for the delivery of our products and transportation
restrictions, if any, could have an adverse effect on supplies and deliveries to and from
our customers and suppliers. In addition, raw materials and finished products may be lost
or damaged in transit for various reasons including occurrence of accidents or natural
disasters.
There may also be a delay in delivery of raw materials and products which may also
affect our business and results of operations negatively. In the event we fail to maintain
a sufficient volume of raw materials and delivery of such materials to us is delayed, we
may be unable to meet our purchase orders in a timely manner or at all, which may result
in loss of sales opportunities that our competitors may capitalize on, thereby adversely
affecting our business, financial condition, results of operations, and cash flows. Any
compensation received from insurers or thirdparty transportation providers may be
insufficient to cover the cost of any delays and will not repair damage to our
relationships with our affected customers and distributors. We may also be affected by an
increase in fuel costs, as it will have a corresponding impact on freight charges levied
by our third-party transportation providers. This could require us to expend considerable
resources in addressing our distribution requirements, including by way of absorbing these
excess freight charges to maintain our selling price, which could adversely affect our
results of operations, or passing these charges on to our customers, which could adversely
affect demand for our products.
Inadequate Availability of Skilled Workforce
The retail industry faces a shortage of proficient workforce, leading to a high
turnover rate. However, we have managed to maintain lower attrition rates than the
industry standard through our talent management programme. This programme has enabled us
to develop a pool of managers and leaders who will steer our future growth. Additionally,
we have strengthened our management team by hiring experts in crucial domains such as
e-commerce, marketing, and supply chain.
4. INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY:
The Company ensures the safety and protection of its assets by having implemented well
defined policies and their implementation in a well efficient manner. The board of the
Company is always well informed regarding the operations of the company. The company
always ensures the dissemination of information through proper channels in a professional
manner. The management takes regular recommendations and advises from the reliable
professionals having experience in their fields, in order to efficiently discharge
responsibilities by giving hands on facts, details and recommendations concerning the
activities covered for audit and reviewed by it during the year.
The conclusions of internal audit reports and effectiveness of internal control
measures is reviewed by top management and audit committee of the Company.
5. FINANCIAL PERFORMANCE:
A. Standalone Financial Performance:
(i) Revenue from Operations and Other Income:
Revenue from operations for the year ended on 31st March 2023 and 31st March, 2022 is
Rs. 9527.55 Lakhs and Rs. 7235.78 Lakhs.
(ii) Expenditure:
The total expenditure in for the year ended on 31st March 2023 and 31st March, 2022 is
Rs. 9325.53 Lakhs and Rs. 7067.61 Lakhs.
B. Profit before Tax:
The profit before tax of the company for the year ended on 31st March 2023 and 31st
March, 2022 is Rs. 202.96 lakhs and 169.40 lakhs.
(iii) Profit after tax:
The profit after tax/net profit of the company in for the year ended on 31st March 2023
and 31st March, 2022 is Rs. 182.51 Lakhs and Rs. 159.67 Lakhs.
6. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:
Our Company is in the business of packaging products made from plastics which caters to
the packaging requirements of various industries. Most of our Companys existing products
are industrial in nature. Therefore, its performance pertaining to the said segment is
mentioned above in the Para 5 as Financial Performance.
7. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS
| Sr. No. |
Ratios |
Is change any significant change compared to last year |
Justification |
| 1 |
Debtors Turnover Ratio |
Yes |
The sales has been significantly increased in the current year however, the Trade
Receivable has increased disproportionately with the sales. |
| 2 |
Inventory Turnover |
Yes |
Due to significant increase in |
|
Ratio |
|
average inventory during the year 2022-2023. |
| 3 |
Interest Coverage Ratio |
Yes |
The PBIT of the company has been significantly increased and the interest expenses of
the company has not been significantly increased, therefore the ratio is improved. |
| 4 |
Current Ratio |
No |
Not required as the change is within the limits |
| 5 |
Debt Equity Ratio |
Yes |
The variation is due to significant increase the owners fund in the company and in
gradual increase in the debt structure of the company. |
| 6 |
Operating Profit Margin |
No |
Not required as the change is within the limits |
| 7 |
Net Profit Margin |
No |
Not required as the change is within the limits |
8. DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS
FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF:
The return on networth of the company for the current year is approximately 8.44% and
10.42% in the previous financial year. The change total change is equivalent to around 19%
which is not a significant change. Further, the return on networth is decreased due to the
increased owners fund pursuant to Initial Public Offer of the equity shares of the
company.
9. DEVELOPMENT IN HUMAN RESOURCES
The Company considers its employees as its main assets. The management believes in the
philosophy of the development of the Company with the development of its employees. Proper
environment of work, all necessities and their safety is looked after. The well-being of
its employees is always a priority to the company. The employees are given proper guidance
and training to execute their tasks. Hence, higher degree of work satisfaction is enjoyed
by the employees of the company.
10. ENVIRONMENT. HEALTH & SAFETY (EHS)
The Company commits to ethical and sustainable operation in all business activities.
Company maintains and implements an Environmental Management System (EMS) for meeting the
purpose of organizations policy and objectives regarding environment. The aims of the
system is use of processes, practices, techniques, materials, products, services or energy
to avoid, reduce or control the creation, emission or discharge of any type of pollutant
or waste, in order to reduce adverse environmental impacts. Adequate Occupational Health
& Safety Management System is adopted by the Company for ensuring the conformance to
the Occupational Health & Safety Management System, legal & statutory
requirements, continual improvement and satisfaction of interested parties (i.e.
customers, suppliers, employees and public).
11. CAUTIONARY STATEMENT:
No reliance should be placed on, the fairness, accuracy, completeness or correctness of
the information or opinions, predictions etc. may constitute "forward looking
statements" contained herein. Certain statements contained in this document may be
statements of future expectations, forecasts and other forward-looking statements that are
based on managements current view and assumptions. Such statements are by their nature
subject to significant uncertainties and contingencies and the actual results, performance
or events may differ materially from those expressed or implied in such statements.
Readers are cautioned not to place undue reliance on any forward-looking statement.
| Date: September 05, 2023 |
|
| Place: Ahmedabad |
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS |
|
Sd/- |
Sd/- |
|
Hikmatbahadur Kunwar |
Manoj Kumar Agarwal |
|
Managing Director |
Director |
|
DIN:00024010 |
DIN:08108458 |
+91-9892691696
