Technopack Polymers Ltd Management Discussions

Your Directors have pleasure in presenting the management discussion and analysis report for the year ended on March 31, 2024.

GLOBAL ECONOMIC OVERVIEW

The global economy witnessed a notable deceleration during the financial year 2024 25, with growth moderating to a range of 3.00% to 3.3%. This slowdown was driven by a combination of persistent geopolitical tensions, elevated trade barriers, and cautious monetary policy amid still-elevated inflation in many economies. High interest rates, implemented earlier to combat inflation, continued to dampen investment and consumer spending. Global trade remained sluggish, reflecting both structural shifts in supply chains and reduced cross-border capital flows. Advanced economies, including the United States and much of Europe, reported weaker-than-expected growth, with Germany facing continued recessionary pressures. In contrast, select emerging markets demonstrated resilience most notably India, which sustained strong GDP growth above 6%, supported by domestic consumption and public investment. Despite signs of gradual stabilization, the global outlook remains uncertain, shaped by ongoing trade disputes, fiscal constraints, and geopolitical risks.

The world economy is at a precarious moment. Heightened trade tensions, along with policy uncertainty, have significantly weakened the global economic outlook for 2025. Higher tariffs resulting in a significant increase in the effective tariff rate in the United States of America are likely to strain global supply chains, drive up production costs and delay critical investment decisions, while also contributing to financial market volatility.

Global economic growth is now projected to slow to 2.4 per cent in 2025, down from 2.9 per cent in 2024, and 0.4 percentage points below the January forecast. The downward revisions in growth forecasts are broad-based, affecting both developed and developing economies. Weakening global trade growth and investment flows are compounding the slowdown. Many trade-reliant developing countries face mounting challenges from reduced.

GDP GROWTH

During the financial year 2024 25, global GDP growth slowed to an estimated range of 2.3% to 3.3%, marking one of the weakest expansions in the post-pandemic period. Advanced economies saw a sharp deceleration, with the United States growing at approximately 1.6% and the Eurozone around 1%, constrained by high interest rates and subdued consumer demand. Chinas growth moderated to 4 4.5%, influenced by continued property sector weakness and external trade pressures. In contrast, India emerged as a global outperformer, with GDP growth exceeding 6%, driven by robust domestic consumption, infrastructure investment, and policy reforms.

INFLATION

Inflation has continued to decline in most economies, albeit at a slower rate, but heightened trade tensions have increased uncertainty about its short-term trajectory. Global headline inflation is projected to decelerate from 4.0 per cent in 2024 to 3.6 per cent in 2025, 0.2 percentage points higher than the January forecast. Falling prices for oil and certain commodities reflecting weakening demand and easing supply constraints are expected to provide some relief. However, rising tariffs, particularly in the United States, are likely to push up consumer prices, potentially reigniting inflation.

TRADE AND INVESTMENT

International trade is losing steam as a growth driver, with global trade growth weakening to 0.6% in 2023 and expected to recover to 2.4% in 2024. The report points to a shift in consumer spending from goods to services, rising geopolitical tensions, supply chain disruptions, and the lingering effects of the pandemic as factors impeding global trade.

INDIAN ECONOMY

After weathering a year of global headwinds, from elevated interest rates to geopolitical tensions, Indias macroeconomic fundamentals have shown remarkable resilience. The economy grew 7.4% year over year1 in the final quarter of fiscal year 2024 to 20252 with 6.5% growth for the whole year setting the stage for a more confident outlook for fiscal year 2025 to 2026.

Entering the new fiscal, Indias economic outlook is buoyed by three key engines: a resilient consumer base, a broadening investment landscape, and a digitally skilled, dynamic workforce. Urban spending is rising, private capital expenditures are showing green shoots, and Indias tech-adaptive talent is driving innovation and showcasing its global capabilities.

GDP RESILIENCE IN ECONOMIC FUNDAMENTALS

Indias GDP growth numbers for the last quarter of fiscal 2024 to 2025 came as a welcome surprise, with the economy growing at a brisk 7.4% year on year. Growth for the full fiscal year came in at 6.5%, driven by strong private consumption expenditure and investments, indicating domestic demand might be more resilient than expected, supported by easing inflation and favorable conditions in rural economies.

The impact of global risks and trade headwinds led to a moderation in exports to 3.9% in the fourth quarter compared with an average 7.4% seen in the past three quarters. Nonetheless, exports for the full fiscal year grew at 6.3%, an improvement compared with the 2.2% seen in fiscal year 2023 to 2024. Goods exports were affected more than services exports, and the latter helped India to reduce its annual current account balance to 0.6% of GDP the lowest since fiscal 2016 to 2017 (except during the pandemic when the balance moved to a surplus).

INDIAS NEAR-TERM OUTLOOK

Backed by improving economic fundamentals and a strong policy push to boost consumption spending (through tax exemptions and easing monetary policy),18 we now expect India to grow between 6.4% and 6.7% in fiscal year 2025 to 2026, in our baseline scenario. Easing inflation is expected to further bolster consumer confidence and purchasing power, fueling a surge in spending across sectors. With oil prices expected to remain range-bound, it will likely keep overall inflation low and support an improvement in the current account balance, given oils significant share in the import bill. We expect strong domestic demand in the first half of the next year, driven by a significant uptick in private spending, followed by strong private investments as businesses factor in uncertainties. Growth next year will be even stronger, and the momentum over the next two years is set to lift GDP beyond its pre-COVID trend. The pandemic-induced gap will not just be closed, it will be decisively surpassed.

INDUSTRY OVERVIEW

The caps closure and preform industry witnessed steady growth in FY 2024 25, driven by continued demand across multiple sectors including food and beverages, pharmaceuticals, personal care, and chemicals. Despite global challenges like supply chain disruptions and inflationary pressures, the industry saw moderate expansion, with growth rates estimated at 4 5%.

The caps closure market remained resilient, with key drivers including increased demand for packaging solutions that offer convenience, tamper-evidence, and sustainability features. Consumer preference for sustainable packaging continued to gain momentum, prompting manufacturers to invest in eco-friendly alternatives such as biodegradable and recyclable caps.

In parallel, the preform industry showed strong performance, particularly in regions with booming beverage and bottled water markets. The shift towards lightweight, cost-effective preforms, combined with advancements in PET (Polyethylene Terephthalate) preform technologies, supported cost efficiency and innovation in the manufacturing process. While demand was somewhat influenced by fluctuating resin prices, the industrys ability to adapt to emerging market needs such as customization and high-performance preforms for PET bottles ensured continued competitiveness.

OPPORTUNITIES & THREATS

Opportunities

1. Automation

Automation is the major trend that will dominate the Indian plastic cap industry during the forecast period due to an increase in demand. It provides methods to boost the efficiency of the molding process to gain more advantages.

2. Innovative closure design enhances brand image

Innovative closure design will enhance the brand image of a company in future markets to grab the attention of more customers. As a result, manufacturers have to focus more on complex structures and colors that may become an emerging trend.

2. High adoption of lightweight caps

Lightweight plastic caps will become a major trend in future markets because they provide ways to reduce production costs and enable manufacturers to attain sustainability. Many companies invest money in designing and producing stylish and lightweight caps for various products.

4. Digitization

The rapid development of digitization today opens up new prospects in the manufacturing process. Advancements in information technologies will lead to greater integration of process flow and may increase transparency in the production process.

5. IOT

IoT (Internet of Things) may become a new trend in the plastic cap industry because it will help make an informed decision. Furthermore, it will help achieve efficiency and automate operations to a large extent.

6. Recycling may become a new trend

Consumers make their best decisions by considering their personal carbon footprint and recycling products may become a new trend in future markets. Recycling products can protect the environment from potential threats.

THREATS

1. Strict regulations by the Indian government on plastic products

The Indian government has imposed strict rules and regulations regarding the use of plastic products. It emphasizes reducing the applications of plastic items in various industries that may hamper growth rate.

2. Recycling programs are not effective

While recycling offers the best solutions for plastic caps, the program is not being launched effectively. Many manufacturers face difficulties in implementing a recycling program due to the lack of knowledge and other factors.

3. High costs of raw materials

The costs of raw materials are increasing over recent years and plastic cap industries have to spend more on them.

4. Implementing new technologies is becoming difficult

Plastic cap manufacturers have to embrace the latest technologies such as 3D printing, artificial intelligence, and IoT in the designing process. However, they are not easy and need proper guidance from technical experts.

5. Lack of skilled workforce

A skilled workforce is necessary for plastic cap production and many companies face a shortage of experienced employees. This will result in low productivity which can affect the growth rate significantly.

6. Awareness about eco-friendly products may force industries to invest additional money

The awareness about eco-friendly plastic products is increasing in recent years which may impact the growth. Also, plastic cap manufacturers have to implement innovative ideas to design products with unique designs.

7. High competition may impact the growth

Nowadays, many start-ups are entering the plastic cap industry which can increase the competition in the market which will affect the growth rates.

SEGMENT-WISE PERFORMANCE

The Companys main business activity is manufacturing of CCM Caps & Closures and Pet Preforms.

OUTLOOK

The Company continues to explore the possibilities of expansion and will make the necessary investments when attractive opportunities arise.

RISK & CONCERNS

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Key business risks and mitigation strategy are highlighted below.

Business Risk

To mitigate the risk of high dependence on any one business for revenues, the Company has adopted a strategy of launching new products/services, globalizing its operations and diversifying into different business segments. The strategy has yielded good results and the Company therefore has a diversified stream of revenues. To address the risk of dependence on a few large clients, the Company has also actively sought to diversify its client base.

Legal & Statutory Risk

The Company has no material litigation in relation to contractual obligations pending against it in any court in India or abroad. The Company Secretary, compliance and legal functions advise the Company on issues relating to compliance with law and to pre-empt violations of the same. The Company Secretary submits a quarterly report to the

Board on the Companys initiatives to comply with the laws of various jurisdictions. The Company also seeks independent legal advice wherever necessary.

Human Resource Attrition Risk

Technopack Polymers Limited key assets are its employees. In a highly competitive market, it is a challenge to address the attrition. Technopack Polymers Limited continues to accord top priority to manage employee attrition by talent retention efforts and offering a competitive salary and growth path for talented individuals.

Macroeconomic Risks

Companys business may be affected by changes in Government policy, taxation, intensifying competition and uncertainty around economic developments in Indian and overseas market in which the Company operates.

Mitigation Strategy

The Company has well defined conservative internal norms for its Business. The Company ensures a favourable debt/equity ratio, moderate liquidity, strong clientele with timely payment track record, appropriate due diligence before bidding and focus on expanding presence in newer markets to minimize the impact in adverse conditions. The Company has geographically and operationally diversified into multiple countries and business segments thereby reducing its dependency on one country or market.

Operational Risks

The Companys operations and financial condition could be adversely affected if it is unable to successfully implement its growth strategies. Competition from others, or changes in the products or processes of the Companys customers, should reduce market prices and demanding for the Companys products, thereby reducing its cash flow and profitability. Product liabilities claims may adversely affect the Companys operations and finance.

Others

The Company is exposed to risks & fluctuations of foreign exchange rates, raw-material prices and overseas investments exposures.

AUDIT AND INTERNAL CONTROL SYSTEM

One of the key requirements of the Companies Act, 2013 is that companies should have adequate Internal Financial Controls (IFC) and that such controls should operate effectively. Internal Financial Controls means the policies and procedures adopted by the Company for ensuring orderly and efficient conduct of its business, including adherence to Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information. Your Companys process of assessment ensures that not only does adequate controls exist, but it can also be evidenced by unambiguous documentation. The process involves scoping and planning to identify and map significant accounts and processes based on materiality. Thereafter, risk is identified and their associated controls are mapped, else remediation is implemented. These controls are tested to assess operating effectiveness. The auditor performs independent testing of controls. The Auditors Report is required to comment on whether the Company has adequate IFC system in place and such controls are operating effectively. Your Companys Internal Control System is robust and well established.

It includes documented rules and guidelines for conducting business. The environment and controls are periodically monitored through procedures/ processes set by the management, covering critical and important areas. These controls are periodically reviewed and updated to reflect the changes in the business and environment.

The Audit Committee periodically reviews the internal controls systems and reports their observations to the Board of Directors.

The Directors have appointed M/s. Padaliya & Associates (FRN: 138580W), Chartered Accountants as the Internal Auditors of the Company for the FY 2024-25 on 28/05/2025.

RAW MATERIAL PRICES

The prices of basic major raw materials used in our manufacturing process viz. stainless steel scrap /flats of various grades doesnt affect much, as we are working in open market scenario.

FINANCIAL PERFORMANCE

During the year under review, the Company has generated total revenue of 1,728.15/- (in Lakhs) (Previous Year 1,276.33/- (in Thousands)). The net profit before exceptional items and taxes is 231.99/- (in Lakhs) (Previous Year

150.28/- (in Lakhs). The net profit after taxes resulted into the profit for the year at 171.61/- (in Lakhs) (Previous Year 112.79/- (in Lakhs).

MATERIAL DEVELOPMENTS IN HR / INDUSTRIAL RELATION / NUMBER OF PERSON EMPLOYED

Our Company believes that the human capital is key to bring in progress. The Company believes in maintaining cordial relation with its employees, which is one of the key pillars of the Companys business. The Companys HR policies and practices are built on core values of Integrity, Passion, Speed, and Commitment. The Companys focus is on recruitment of good talent and retention of the talent pool. The Company is hopeful and confident of achieving the same to be able to deliver results and value for our shareholders. As on 31^st March, 2024, the total employees on the Companys rolls stood at 11 and on contract basis

ACCOUNTING POLICIES

The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year. The financial statements have been prepared under the historical cost convention on an accrual basis. The management accepts responsibility for the integrity and objectivity of the financial statements, as well as for the various estimates and judgment used therein.

DISCLOSURE OF ACCOUNTING TREATMENT IN PREPARATION OF FINANCIAL STATEMENT

The Company has followed all relevant Accounting Standards laid down by the Institute of Chartered Accountants of India (ICAI) while preparing Financial Statements.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS

The Company has identified the following ratios as key financial ratios:

Sr. No.	Particulars	2024-25	2023-24	Changes	Reason
1.	Debtors Turnover Ratio	14.30	10.89	31.00	Improved collection efficiency
					from customers compared to previous year. (Favourable Variance).
2.	Inventory Turnover Ratio	1.06	0.82	29.00	Decrease in ratio attributable to higher average inventory held to meet early next year demand.
3.	Debt Service Coverage Ratio	1.34	0.61	120.00	Ratio improved due to higher earnings available for debt servicing, as current year debt obligations were lower.
4.	Debt Equity Ratio	0.15	0.41	-63.00	Ratio decreased due to repayment of borrowings and increase in shareholder funds.
5.	Return on Equity Ratio	0.09	0.06	50.00	ROE increased marginally; however, net profits were subdued due to higher depreciation on new assets acquired.
6.	Creditors Turnover Ratio	53.79	107.21	-50.00	Payables paid off quicker than prior year in compliance with MSME Act timelines. (Favourable Variance).
7.	Net Capital Turnover Ratio	1.80	1.33	35.00	Improved ratio due to increased sales with proportionate rise in working capital, reflecting better utilisation.
8.	Return on Capital employed	0.13	0.08	62.00	Ratio improved due to higher EBIT; however, depreciation increase has somewhat offset this gain.
9.	Return on investment	-0.39	-0.17	129.00	Negative return owing to a fall in market value of shares during the current year, resulting in unfavourable variance

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF

Sr. No.	Particulars	2024-25	2023-24	Changes	Reason
1.	Return on Net Worth	0.09	0.06	50.00	RONW increased marginally; however, net profits were subdued due to higher depreciation on new assets acquired.

CAUTIONERY STATEMENT

Statements in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.

PLACE: MORBI	By Order of the Board
DATE: 05/09/2025	For, TECHNOPACK POLYMERS LIMITED
	Sd/-	Sd/-
	Chetankumar I. Pandya	Kalpeshkumar I. Pandya
	DIN: 08196693	DIN: 08196642
	Managing Director	Director & CFO