Shilp Gravures Ltd Management Discussions.


India to retain status as fastest growing major economy in 2019-20 according to World Bank. Fuelled by policy reforms and rebound in credit, Indias economy is forecast to expand by 7.5 per cent during the 2019-20 fiscal year and retain its position as the fastest growing major economy in a world as consumption remains robust and investment growth continues, and as economic activity benefits from various policy reforms.

For fiscal 2020, sustaining the momentum in overall investments will be a tough task without support from private investments. With continuously improving capacity utilization and the end of the de-leveraging phase for corporates, conditions are ripe for a revival of private corporate investments," The positive outlook is buttressed by strong drivers emanating from services sector.

Better demand conditions, settled GST implementation, capacity expansion resulting from growing investments in infrastructure and continuing positive effects of the reform policies undertaken and improved credit off-take, especially in services sector at 24 per cent, will sustain the robust GDP growth in the range of 7.5 per cent in 2019. (Source CII).

Drivers for growth : According to the report, there are seven key drivers for growth including GST, Insolvency and Bankruptcy Code, ease of doing business, agriculture, credit flow, oil price and infrastructure. The Governments "Digital India" initiative, which focuses on three core components: creation of digital infrastructure, delivering services digitally and increasing digital literacy will lead to empowerment in the rural areas.

However, gives a thumbs up to the current government saying "India has an ambitious government undertaking comprehensive reforms and we have all the reasons to expect this government to continue economic policies to create friendly environment for businesses and push its growth potential up.

The Government of India, under the "Make in India" initiative, has provided an environment to give a boost to the manufacturing sector and aims to take it up to 25% of the GDP from the current 17%. It also aims to increase the purchasing power of the average Indian consumer, which would further boost demand, and stimulate development, in addition to benefitting investors.


The growth of the Indian packaging industry is heavily influenced by changing demographics such as growing urbanization and the rising proportion of middle class consumers. These changes drive the need for new packaging formats, such as different sizes, materials, and strength.

The industry constitutes about 4 per cent of the global market. As the requirement for packaging is rising across sectors with traditional businesses preferring to package products, and the retail and e-commerce growing rapidly, the sector is growing at a robust pace. The industry certainly presents potential growth opportunities for new entrepreneurs, and small and medium enterprises.

Flexible packaging has been one of the fastest growing sectors in the packaging industry over the past 10 years, considering increased consumer focus on convenience and sustainability; this rapid development will continue to accelerate. Given its myriad benefits in terms of superior aesthetics, improved functionalities, lightweighting, sustainability advantages and optimized barrier properties. Food sector within the FMCG is the biggest consumer of flexible packaging with a massive share of over 70%.

Demand for flexible packaging in the Indian market, estimated at $ 5600 Million in 2017, is expected to grow at nearly 10 percent a year over the next five years. The flexible packaging supply chain is also benefitting from the concerted efforts of the Ministry of Food Processing Industries (MoFPI) in providing financial support for the construction of Food Mega Parks and improved cold store facilities.

Flexible packaging offers all properties needed for primary packaging such as lightweight, high performance, high barrier, low contamination, keeping the product completely sealed off from the environment. Flexible packaging also offers a number of sustainability advantages including low raw material consumption owing to light weighting thus leaving lesser carbon footprint. Flexible packaging paves way for reduced energy usage at manufacturing, transportation and disposal stages besides producing relatively low waste produced as compared to conventional packaging formats.

Flexible packaging can now be made in a wide variety of innovative shapes, sizes and appearances, and can include components such as handles and opening and reclosing features such as zips and spouts to name a few. Changing consumer lifestyle has increased dependence on processed, pre-cooked and packed foods, which also mobilized the entire flexible packaging supply chain to sync product offering as per end customers requirement. The flexible packaging industry has witnessed introduction of new and efficient films that are used in flexible packaging. Modified Atmosphere Packaging (MAP), vacuum skin packaging are some of the current trending packaging solutions which have been developed to meet end customer demand.


Gravure is an advanced, high-tech printing process operating the fastest and widest printing presses in the world, and is was the first printing process to employ a totally digital environment. The gravure printing process holds a prominent place in the printing industry with its efficient, long run, highspeed and consistently high-quality printing method and is well aligned with its simplicity as well as the negative impact the process has on the environment. Growth towards environmental sustainability is a powerful move for the gravure industry and it must take a further step in to sustainable practice and and procedure.

Gravure is used for labels, cartons, packaging, gift-wrap, wall and floor coverings, and a variety of precision coating applications. In the face of uncertain economic times, the gravure market is striving to maintain margins and market share while focusing on technological advances to drive growth.

Flexible packaging has been a strong area for gravure. Flexible packaging is one of the high growth markets for packaging, and gravure has grown along with this market segment. Both of these markets are dominated by gravure printing at this time, but gravure will continue to play an important role in flexible packaging. In India, rising urban trend and growing brand consciousness has improved the prospects of the gravure industry due to growing demands for sophisticated packaging. More cost effective, easy to handle and better protection has led the flexible packaging industry to grow at a fast clip. The Governments decision to permit 100% FDI in multibrand retail is also expected to support the sector.

Your Company serves complete cross-section of the gravure industry such as:

• Flexible Packaging

• Anilox Rollers

• PVC Flooring

• Decorative Laminates

• Specialty Coatings

• Artificial Leather

• Gift Wrapper

• Security printing

• Transfer printing

India has an advantage of large volume consumption of consumer products and therefore gravure is the most preferred technology to handle such volumes due to economy of scale, availability of skilled manpower and high quality printing.


Flexible packaging has been the prime-mover of the packaging industry. Owing to developments across consumer and industrial markets that use polymeric films, improvements in manufacturing practices, and continued technological innovations, the packaging market has been able to continually grow and evolve. As a result of the various features that come along with flexible packaging right from the ease of handling, storage, to being cost efficient, flexible packaging has carved a strong position for itself on the global turf.

One of the main factors driving the growth of flexible packaging market is the rise in its demand and wide acceptance of this type of packaging across segments such as food and beverages, industrial goods and Fast Moving Consumer Goods (FMCG). Enhanced functionality and improved aesthetics have made flexible packaging perfect for branding and display of goods and products at the point of sale (POS), in turn driving sectoral growth.

Your company continues to cater the Indian Packaging Industry with its dedicated endeavors which in turn stimulates the growth of the Company in the future. Your company has been investing in training the manpower and upgrading the technology from time to time to keep the pace with the changing trends.


Flexible packaging markets remain highly competitive at both the national and regional levels, often with narrow margins. The global flexible packaging industry continues to be highly fragmented although a small yet growing number of multinational converters are adopting a global strategy to grow in sync with their clients who are expanding their footprint in emerging markets including Eastern Europe, Asia, Africa and Latin America. There is an increasing concern among consumers for environmentally sustainable packaging solutions that has made R&D towards light weighting of substrates and packaging structures rather ubiquitous. There is a growing clamor for packaging that contributes to the Circular Economy leaving lesser waste and thus lower carbon foot print.

The contemporary sustainability narrative now puts a much larger onus on to the packaging manufacturers to innovate and ensure reduction at source. Worldwide more and more bio-degradable products are being used. Packaging films are often considered environment unfriendly; face significant opposition from various strata of society and are subjected to severe regulatory and statutory scrutiny although it has been proved beyond reasonable doubt that this type of packaging requires much less energy throughout all the critical stages of its life cycle i.e. during manufacturing, transportation and disposal when compared with its rigid counterpart


According to Smithers Pira, the global market for flexible packaging is forecast to reach upto $ 248000 million by 2020. The major growth engines shall be the Asia-Pacific (APAC) countries.

Packaging continues to be a growth market, and within the packaging sector, flexible packaging is arguably the fastest growing segment. This growth brings with it new challenges for flexographic printers. Flexible packaging is the most economical method for packaging, preserving and distributing food and other consumables. Flexible packaging also carries a lower supply chain cost than glass and metal and can deliver more shelf appeal and product protection.

The players in the flexible packaging industry worldwide are coming up with more and more innovative and effective flexible packaging products. Flexible packaging designs such as zippers, pouring spouts, peel-off lids, and microwavable pouches provide consumers with convenience in accessing and disposing the products like never before. Such packaging designs are being increasingly improvised to meet the growing consumer demand for food and beverage products offering higher convenience and portability. Many packaging companies/ convertors are planning to devise innovative products to match ever evolving brand expectations. A lot of emphasis is being paid on intelligent packaging. Most of the convertors are focused on inventing new packaging designs or attempting to revamp existing packaging to be able to offer better value proposition to the brands.

With benefits such as functional convenience in handling & transportation, cost effectiveness and brand protection from counterfeiting, flexible packaging industry worldwide is led by a strong growth. India now has the fourth largest flexible packaging market, representing around 6% global market, behing China and Japan. Analyst with PCI wood Mackenzie, says over next five years , flexible packaging will grow at nearly 10% per annum.


As on March 31, 2019, the Company has only two reportable segments, that of i) manufacture of engraved copper rollers and ii) energy generation through wind mill. The segment revenue, results, assets, and liabilities include the respective amounts identifiable to each of the segment and amount allocated to it. The figurative parameter in detail is provided in Note no. 40 (Segment Reporting) in the Note to Financial Statements.


An overview of the financial performance is given in the Boards Report. The Audit Committee constituted by the Board of Directors periodically reviews the financial performance and reporting systems.


The Company has laid down internal financial controls. The policies and procedures adopted by the Company ensure orderly and efficient conduct of its business, safe- guarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable information.

Your Company have an Audit Committee and has met four times in the year. Audit Committee ensures proper compliance with the provisions of the Listing Regulations, Companies Act, reviews the adequacy and effectiveness of the internal control environment and monitors implementation of internal audit recommendations. Besides the above, Audit Committee is actively engaged in overseeing financial disclosures. The recommendations of the Internal Auditors and the Audit Committee are followed up effectively for implementation.


Shilp employs more than 450 employees directly and indirectly. It believes that the quality of these employees is the key to its success and is committed to providing necessary human resource development and training opportunities to equip employees with additional skills to enable them to adapt to contemporary technological advancement and evolving workplace requirements. The focus of any industry is usually on its men and machinery and if these are looked after well then any business is sure to succeed.

We took up extensive in-house on the job training for various category of employees and fresh recruits. Besides this the training & seminar participations for new norms like GST was also in the agenda so as to ensure a smooth transition of the systems in the new tax norms. This year in addition to having annual health check-up we also informally educated our employees on TB. Your Companys Human Resource agenda makes the "EMPLOYEES" its focal point and hence their well-being, skill up gradation and livelihood has been the most targeted area.

Your Company agenda to build a performance driven culture aiming at constant growth has been a priority throughout and to sustain continual high performance standards and growth it is the focus on the work culture and good management practices that bring in the desired results. All these factors have attributed in making the human resource at the Company a culturally diverse yet one of the best functional teams at work.


Statements in the Management Discussion & Analysis Report describing the Companys objectives, projections, expectations, opinion and predictions may please be considered as "forward looking statements" only. Actual results may differ materially from those expressed or implied. Important factors that could influence the Companys operations should be viewed in light of changes in market conditions, domestic demand and supply conditions, prices of raw materials, economic developments in the country, changes in the government regulations, tax laws and other statutes and such other incidental factors which are material to the business operation of the Company.

On the behalf of The Board of Directors
Ambar Patel Shailesh Desai
(Managing Director) (Director)
Place: Rakanpur
Date: 27th April, 2019