INDUSTRY OVERVIEW
The global packaging industry continues to grow mainly driven by an increasing demand
from the FMCG, Food and Beverage, Retail, Tobacco, E-Commerce, and Healthcare industries.
Over the past few years, India has maintained its position as one of the fastest growing
economies in the world, and consequently consumption of packaging products has also grown
rapidly. Given the environmental impact of packaging materials and the plastic waste
crisis, consumers world-wide are demanding the use of eco-friendly packaging. Accordingly,
all manufacturers are looking towards opportunities to innovate and manufacture more
sustainable packaging products, and the organisations who will be capable of such
offerings will win.
COMPANY OVERVIEW
Your Company is one of Indias leading producers of sustainable packaging solutions for
customers across industries. The Company partners with customers to provide
paperboard-based packaging products mainly folding cartons, printed blanks and outers and
litho-laminated cartons. The Company also provides flexible packaging products such as
laminates, pouches, wrap around labels and sleeves. Headquartered in Mumbai, India, the
Company has a pan-India presence with 8 state-of-the-art manufacturing facilities and
marketing offices in key metro cities of India besides an international presence through
an office in the UAE. The Company has set-up TCPL Innofilms Private Limited, a wholly
owned subsidiary to manufacture blown polyethylene (PE) films. The unique technology being
employed in this unit enables the Company to offer oriented PE films, so that it can
produce a mono-polymer laminate which is fully recyclable. This development will help
replace multi-polymer, non-recyclable products that are currently used for the packaging
of consumer goods and food products. This unique plant is one of a kind and your Company
will be amongst the very few companies in India to be equipped with such capability.
Unfortunately, in financial year 2022-23 the Company faced technical challenges due to the
machines performance and currently efforts are ongoing along with the machine supplier to
rectify the same and have the line functioning smoothly very soon. The Company has also
more than doubled the conversion capacity of the flexible packaging plant where the
Company manufactures a vast range of laminates, shrink sleeves, and pouches. The offering
made by TCPL Innofilms Private Limited, further strengthens the opportunity for this
business.
During the year the Company has further acquired shares of Creative Offset Printers
Private Limited (COPPL), the subsidiary Company based in Greater Noida which specializes
in manufacturing of printed rigid boxes and leaflets for the mobile phone and consumer
electronics industry. The Company has further invested in modernising the plant and
improving the manufacturing process, in addition to catering to the working capital needs
of the business. The rigid box segment is a high potential and value-added segment, with a
growing profile in consumer electronics, cosmetics, perfumes and fragrances, liquor, and
sweets. TCPL Middle East FZE which is the wholly owned subsidiary of the Company in UAE
has serviced the customers of the Company through its office in Dubai and it is likely to
grow the business in the Gulf region and other Countries. Additionally, the Company has
also expanded its offset capacity by adding a new printing line at its Silvassa plant.
With this capacity increase, the Company is well poised to manage the higher demand for
sustainable packaging solutions. While continuing to enhance the Companys capacities to
capture growth, the Company is focused on consolidating and improving the efficiency of
its facilities.
FINANCIAL PERFORMANCE
In the financial year 2022-23, your Company delivered a healthy performance achieving a
robust turnover of Rs. 1442.21 crore on a consolidated basis, an increase of 35.37%; and
Rs. 1400.01 Crore on a standalone basis, an increase of 32.59% on year-on-year basis. The
total revenue including other income for the year has been Rs. 1484.50 crore on a
consolidated basis from Rs. 1088.60 crore in the previous year, and Rs. 1441.84 crores on
a standalone basis from Rs. 1078.40 crores in the previous year. On a consolidated basis,
the EBIDTA margin stood at 17.03%, and on a standalone basis it is 17.55% over from 14.82%
and 15.05% respectively in the previous year.
SUSTAINABILITY INITIATIVES
Your Company is wholly committed to be Indias leading sustainable packaging Company.
Paperboard packaging is very sustainable and fully recyclable. Most of the paper and
paperboard used in the products are made from recycled or responsibly forested and sourced
pulp products. Paper is also an excellent replacement for non-recyclable forms of plastic
packaging. Further, the investment in TCPL Innofilms Private Limited is specifically aimed
at addressing the plastic pollution crisis. In addition to the sustainable nature of its
products, your Company is also investing in making the manufacturing process more
sustainable and environment friendly. During the fiscal year the Company invested in
rooftop solar at its Goa and Guwahati locations. At both these locations, our own
production of solar power accounts for around 20% of the total energy needs. This not only
helps the Company wane off fossil fuels but also offers a very compelling
return-on-investment. The solar generation from an earlier installation at Silvassa has
also been satisfactory. The management has decided to additionally invest in more such
capacities at its other locations in the current year and the years ahead.
OPPORTUNITIES
The macroeconomic conditions in India are expected to continue to improve considering
the continuation of a stable government in the country. With a diverse geographical
presence across India, your Company fulfils the requirements of its customers for both
carton and flexible packaging, giving your Company a competitive advantage. Also,
considering a sizeable quantity of unutilised capacity, an improvement in the market
scenario will translate into high growth prospects for the coming years. The Company is
now recognised as a leader in its field across segments, and your Companys management is
very confident of leveraging its existing relationships with leading customers, besides
entering new customer segments, to continue with high rates of growth as witnessed in the
past. The ability to produce recyclable flexible packaging also gives the Company an edge
over its competition.
THREATS
Due to the pandemic and the conflict in Ukraine, the world is witnessing unprecedented
levels of inflation resulting in higher interest costs. In the past few months, there are
significant and unprecedented increases in costs of not only raw materials but also
operating expenses, increasing pressure on margins. Globally, prices for the main raw
materials of the paper and plastics industries have been very volatile. Key chemicals and
metal prices have also fluctuated considerably. While the Company tries to pass this on to
customers and absorb some of it by improving productivity, there is still a threat of lag
in passthrough that may impact margins. The volatility of raw material costs is felt in
both the mono-carton and the flexible packaging businesses. One of the risks for the
Company includes growth of the underlying end-user industries such as FMCG, Food &
Beverage, Tobacco, and Liquor. The FMCG sector is the largest contributor to Companys
revenues and any adverse headwinds in the sector could also impact the Companys
performance. Currently the biggest threat to this segment is lack of demand growth due to
persistently high inflation, which may result in lack of growth for packaging materials.
SEGMENT–WISE OR PRODUCT-WISE PERFORMANCE
Your Company currently has only one segment of business i.e., Printing and Packaging.
DIVIDEND POLICY AND AMOUNT
The Board of Directors of the Company has adopted the policy of paying out 20% of
retained profit, as Dividend each year. Accordingly, it is recommended by the Board of
Directors to continue the same percentage for adoption in the ensuing Annual General
Meeting. The dividend of Rs.20.00 per equity share would amount to a pay-out of Rs. 1820
Lakhs, subject to deduction of tax at source as per provisions of prevailing of Tax Rules.
The dividend distribution policy is available on the weblink
https://www.tcpl.in/wp-content/ uploads/2021/05/Dividend-Distribution-Policy.pdf
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has adequate internal control system and a defined organizational structure
besides, internal rules and regulations for conducting the business. The Management
reviews actual performance with reference to budgets periodically. The Company has an
Audit Committee, Independent Statutory Auditors, Internal Auditors and Risk Management
Committee who submit reports periodically which are reviewed and acted upon.
MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER
OF PEOPLE EMPLOYED
Industrial relations continue to remain cordial during the year and total 2083
employees are on the Companys payroll as on 31st March 2023 as compared to
1906 employees on the Companys payroll as on 31st March 2022.
DISCLOSURE OF ACCOUNTING TREATMENT
In preparation of financial statements, the Company has not followed a treatment
different from that prescribed in the Accounting Standards. There are no significant
changes in key financial ratios viz Debtors Turnover, Inventory Turnover, Interest
Coverage Ratio, Current Ratio, Debt Equity Ratio, Operating Profit Margin, Net Profit
Margin.
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