Shrenik Ltd Management Discussions.

A. Industry structure and developments.

As per the recent researches, India embraces 15 Rank among paper manufacturing nations in the world and is the greatest growing market for paper in the world with a growth rate of about 7 percent yearly.The demand is projected to boost to 23.5 million tonnes by 2024- 25. The Paper Industry is generally categorized into four main sections namely, writing and printing papers, Industrial Packaging Paper, Specialty Paper and newsprint. The paper industry in India has to turn into further promising as the domestic demand is on the rise. Escalating population and literacy rate, development in GDP, development in the manufacturing sector and lifestyle of individuals are probable to account for the development in the paper industry of India.

India produces many varieties of papers, namely, printing and writing paper, packaging paper coated paper and some speciality paper. Varieties under printing and writing paper are cream wove paper, super printing paper, maplitho paper (non-surface and surface size), copier paper, bond paper and coating base paper and others. The varieties under packaging paper are kraft paper, boards, poster paper and others. The other varieties under coated paper are art paper/board, chromo paper/board and others.

B. Opportunities and Threats.

In spite of the continual focus on digitization, Indias requirement for paper is anticipated to rise greatly in the coming years, principally due to a sustained boost in the number of school-going children. Growing consumerism, modern retailing, rising literacy and the growing use of documentation will continue demand for writing and printing paper buoyant. The exponential enlargement of e-commerce in the nation has opened up the latest horizon and could donate significantly to the demand where the paper is being lengthily used for packaging. The rising demand indicates there is a lot of headroom for development in India. The governments continued focus on literacy, amplified consumerism, and increase in organized retail are predictable to positively affect paper consumption and demand in our country.

Consequently, the Paper Traders have huge scope of spreading their business across the several geographical areas all over India. Considering the Gujarats geographical area to be specific to our Business area, there are around 33 districts and 250 talukas to be served. Availability of this huge scope encourages the producers and the traders to increase their production, marketing and selling capacities respectively. Apart from being situated at Gujarat, our Company has specifically, established its Branch Offices in Surat, Jaipur and Mumbai which are another promising state of India for the Paper Market.

One of the main challenges of the Indian paper industry is the ever-increasing wood and pulp prices which serve as the raw materials for making paper. Aside from the increasing prices of the Papers, the huge working capital requirements too remain a challenge. But on comparing the opportunities and the challenges, its the opportunities that carries the heavy weight. Hence the Indian Paper Industry and the Paper Traders are here to grow!

C. Segment–wise or product-wise performance.

The sale of Papers of our company in the Financial Year 2018-19 amounted to Rs. 834,96,11,739/- bifurcated amongst the products

like Coated Paper, Maplitho, Copier, FBB, Color Paper, Imported Maplitho Paper and Imported Coated Paper.

D. Outlook

The trends like high propensity to spend on Education, increase in advertising through print media, growing affluence and lifestyle changes, increasing use of package papers, etc. sets a positive outlook for Paper Industries and Paper Traders. As the Company carries the distributorships of around 6 Distributors as mentioned in the Annual Report, with its location in 4 cities, the scope in the times to come seems very wide and depicts positive trends in all the spheres of the Company.

Following remain the positive attributes of the Company:

1. Locational Advantage

2. Cordial relation with our Customers and Suppliers

3. Experience of the Promoters

4. Geographical expansion.

E. Risks and concerns.

Risks remain an inherent part of every Business and one of the major risks in the Indian paper industry is the ever-increasing wood and pulp prices which serve as the raw materials for making paper. Aside from the increasing prices of the Papers, the huge working capital requirements remains a matter of concern.

F. Internal control systems and their adequacy.

The Company has an adequate and efficient internal control system, which provides protection to all its assets against loss from unauthorized use and for correct reporting of transactions. The internal control systems are further supplemented by internal audit carried out by the Internal Auditor of the Company and periodical review by the management. The company has put in place Proper controls, which are reviewed at regular intervals to ensure that transactions are properly authorized & correctly reported and assets are safeguarded. The Audit Committee of the Board addresses issues raised by both the Internal and Statutory Auditors. The internal control systems are implemented to safeguard the Companys assets from loss or damage. To keep constant check on cost structure and to provide adequate financial and accounting controls and implement accounting standards. In addition to above, the Company has formulated a Vigil Mechanism (Whistle Blower Policy) for its Directors and Employees of the Company for reporting genuine concern about unethical practices and suspected mal-practices.

G. Discussion on financial performance with respect to operational performance.

The Company continues to see marginal growth in its overall performance in the financial year 2018-19 driven by the performance of the segment in which the Company operates. The total income of the Company increased to Rs. 838,36,87,450/- from Rs. 594,11,02,170/-in the previous year i.e. the Company recorded the growth at a rate of 41.11%. The profit before tax amounted to Rs. 17,30,61,498/- as against Rs. 12,15,80,433/- in the previous year. The net profit after tax was increased to Rs. 11,11,88,258 from Rs. 7,91,08,484/- of the previous year.

H. Material developments in Human Resources / Industrial Relations front including number of people employed.

The Company has in place adequate number of employees as required in its Registered Office, Branch Offices and in its Godowns. Professionals with required amount of experience and knowledge are hired on need to need basis by the Company. The Industrial relation of the Company with various suppliers, customers, financial lenders and employees is cordial. There are total 25 employees on the payroll of the Company.

I. Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations thereof, for:

(i) Debtors Turnover

There was an increase of 58% in the Debtors Turnover ratio in comparison to the previous year 2017-18 because there has been an increase in the credit period given to the Customers and simultaneously there has been an increase in the customer base of the Company. (ii) Inventory Turnover - Not Applicable (iii) Interest Coverage Ratio - Not Applicable (iv) Current Ratio - Not Applicable (v) Debt Equity Ratio - Not Applicable (vi) Operating Profit Margin (%)- Not Applicable (vii) Net Profit Margin (%) or sector-specific equivalent ratios - Not Applicable

J. details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof. – Not Applicable K. Forward looking statements:

Outlook for future are estimates based on certain assumptions and expectations of future events, eco-political and other developments across the country, the company cannot guarantee that these are accurate or will be realized. The companys actual results, performance or achievements could thus differ from those projected in any forward looking statements. The company assumes no responsibility to publicly amend or revive any such statements on the basis of subsequent developments, information or events.

2. Disclosure of Accounting Treatment:

The Company has followed all the treatments in the Financial Statements as per the prescribed Accounting Standards.

Date : 25.07.2019 FOR AND ON BEHALF OF THE BOARD Place : Ahmedabad SHRENIK LIMITED


Shrenik Vimawala

Chairman and Managing Director DIN 03474255