Unick Fix-A-Form And Printers Ltd Management Discussions

A. Global Economic Overview :

In 2023, global economic growth slowed to 3.1% from 3.5% in 2022, with Asia contributing disproportionately despite challenges like a weak Chinese recovery, sustained weakness in the USA, higher energy costs in Europe, and global consumer sentiment dampened by conflicts like the Ukraine-Russia war and the Red Sea crisis. Monetary policy tightening led to increased policy and interest rates for new loans. Advanced economies saw growth slow from 2.6% in 2022 to 1.5% in 2023 and 1.4% in 2024 due to policy tightening. Emerging markets and developing economies also experienced a modest growth decline from 4.1% in 2022 to 4.0% in 2023 and 2024. Global inflation is projected to decrease steadily from 8.7% in 2022 to 6.9% in 2023 and 5.8% in 2024, aided by tighter monetary policy and lower international commodity prices, though core inflation decline is expected to be gradual. The US Federal Reserve raised interest rates significantly, reaching the highest level in over 22 years. Global trade in goods declined by nearly US$ 2 Trillion in 2023, while trade in services expanded by US$ 500 Billion. The cost of Brent crude oil averaged US$ 83 per barrel in 2023, down from US$ 101 in 2022, partly due to Russian crude oil finding new markets outside the EU and global demand falling short of expectations. Despite challenges, global equity markets ended 2023 positively, with major benchmarks delivering double-digit returns, driven by declining inflation, a slide in the dollar index, falling crude prices, and expectations of rate cuts by central banks.

B. Indian Economic Overview

The Indian economy was estimated to grow 7.6% in the 2023-24 fiscal against 7.2% in 202223 mainly on account of the improved performance in the mining and quarrying, manufacturing and certain segments of the services sector. India retained its position as the fifth largest economy. The Indian rupee displayed relative resilience compared to the previous year; the rupee opened at H82.66 against the US dollar on the first trading day of 2023 and on 27 December was H83.35 versus the greenback, a depreciation of 0.8%. In the 11 months of FY 2023-24, the CPI inflation averaged 5.4% with rural inflation exceeding urban inflation. Lower production and erratic weather led to a spike in food inflation. In contrast, core inflation averaged at 4.5%, a sharp decline from 6.2% in FY 2022-23. The softening of global commodity- prices led to a moderation in core inflation. The nations foreign exchange reserves achieved a historic milestone, reaching US$ 645.6 Billion. The credit quality of Indian companies remained strong between October 2023 and March 2024 following deleveraged Balance Sheets, sustained domestic demand and government-led capital expenditure. Rating upgrades continued to surpass rating downgrades in H2 FY 2023-24. UPI transactions in India posted a record 56% rise in volume and 43% rise in value in FY24.

Growth of the Indian economy

			F21	F22	F23	F24
Real (%)	GDP	growth	-6.6%	8.7	7.2	7.8E

Growth of the Indian economy quarter by quarter, FY 2023-24

			Q1F24	Q2F24	Q3F24	Q4F24E
Real (%)	GDP	growth	8.2	8.1	8.4	8E

In 2023, India faced a challenging monsoon, experiencing a five-year low in rainfall, with August being exceptionally dry, receiving only 94% of its long-term average rainfall. Despite this, wheat production was anticipated to reach a record 114 million tonnes in the 2023-24 crop year, while rice production was expected to decline to 106 million metric tonnes due to adverse weather. Kharif pulses production was estimated lower than the previous year due to climatic conditions.

Economically, India saw growth across various sectors. The manufacturing sector output was projected to grow by 6.5%, compared to 1.3% in the previous year, and the mining sector by 8.1%. Financial services, real estate, and professional services were estimated to grow by 8.9%. Real GDP was estimated at H171.79 Lakh Cr, with a growth rate of 7.3%, while nominal GDP was at H296.58 Lakh Cr. Nonperforming assets in scheduled commercial banks decreased to 3.2%.

Indias exports stood at US$ 778 Billion, with increases in direct tax and GST collections. Despite challenges, the agriculture sectors growth was projected at 1.8%. Other sectors, like trade, hotel, transport, communication, and broadcasting, were expected to grow at a slower pace compared to the previous year. (Source: Business Standard)

India achieved significant milestones, emerging as the fifth largest economy with a GDP of US$ 3.6 Trillion and a nominal per capita income of INR 123,945. Its stock market grew, becoming the worlds fourth-largest, and foreign investment in Indian government bonds surged. India maintained its ease of doing business ranking and saw a decline in unemployment to 3.2% from 6.1% in 2018.

C. Outlook

India withstood global headwinds in 2023 and is likely to remain the worlds fastest-growing major economy on the back of growing demand, moderate inflation, stable interest rates and robust foreign exchange reserves. The Indian economy is anticipated to surpass US$ 4 Trillion in 2024-25.

Union Budget FY 2024-25

The Interim Union Budget 2024- 25 retained its focus on capital expenditure spending, comprising investments in infrastructure, solar energy, tourism, medical ecosystem and technology. In 2024-25, the top 13 ministries in terms of allocations accounted for 54% of the estimated total expenditure. Of these, the Ministry of Defense reported the highest allocation at Rs. 6,21,541 Cr, accounting for 13% of the total budgeted expenditure of the central government. Other ministries with high allocation included Road transport and highways (5.8%), Railways (5.4%) and Consumer Affairs, food and public distribution (4.5%).

(Source: Times News Network, Economic Times, Business Standard, Times of India)

D. Printing Industry in India:

In the Indian financial year from April 2023 t March 2024, the reports on the economy and segments such as automobiles and FMCG sales vary from month to month. But the overall story is of real GDP growth from 5% to 6%. The print and packaging industries are also in this area in terms of volume growth but with the inflationary price of raw material over the past years their nominal growth appears higher. Raw material and consumable supplies have eased and the prices of at least paper and board have cooled down.

Packaging is among the high growth industries in India The Packaging Market size is expected to grow from USD 1.10 trillion in 2023 to USD 1.33 trillion by 2028, at a CAGR of 3.89% during the forecast period (2023-2028). developing @ 22-25% per annum and becoming a preferred hub for packaging industry.

India represents one of the largest commercial printing markets in the Asia Pacific region. The market is primarily driven by the development of innovative printing technologies by the manufacturers. They have started focusing on introducing engineered products with a reduced carbon footprint, higher energy efficiency, and better resistance to chemicals such as solvents and cleaners. The market is further propelled by the use of commercial printing to its cost- effectiveness and better print quality as compared to smaller printers. Apart from this, commercial printing is also crucial in the e-commerce industry, especially in the production of brochures, pamphlets and leaflets. Moreover, the transition to digital technology has also provided a positive impact on the market growth.

E. Human Capital :

The most important asset of our company isnt something we can put our hands on. It isnt equipment or the physical plant, and it isnt data, technology, or intellectual property. The most valuable part of our company is the people?the human capital?and any plans to move our business forward have to start there. Without the availability of employees and labour no industry can work. Hence for that purpose the company keeps in mind the welfare of all the Employees and Labours. Company maintains smooth relations with whole of the workforce and incentives are provided to them from time to time.

F. Segment Growth Drivers:

Availability of Labour, Raw Material and Capital. A strong customer base is must for all the segments and hence required in this industry also. Keeping updates of all the available and updated technological changes.

G. Review of Companys Business and Financials :

H. Opportunities :

India has averted the effects of the global slump and continues to grow. More and more multinational companies are now targeting India as the hub for manufacturing and exporting. This provides good opportunities to component manufacturers and service providers for accelerated growth. Project expansion is in progress demanding many companies

I. Challenges for Printing industry :

Maintaining existing customer base, servicing them with the goal of retaining their business is imperative. Also, the importance of the retention of expert employees cannot be ignored. Building & communicating will always be the most valuable investment organization makes to delivering sustainable growth. The pressure of senior managers to deliver will intensify significantly in future with fierce competition.

J. Internal Control Mechanism :

The Company has in place a Systematized setup for the purpose of Internal Control. The company has an authorized person for the purpose of management of internal control of the Organization. There are neither any Loop in the internal control of company nor is there any Activity carried which results in any interruption in the smooth functioning of the operations.

K. Changes in the Nature of Business :

There has not been any change in the Nature of business being carried by the Company. The Company is still working hard for being a leader in the Printing industry in all over the India. There has not been any change in the operations of the company except in case of up gradation of the Technology.

L. ENVIRONMENT AND SAFETY

The need for environmentally clean and safe operations is companys key priority. The Company policy requires the conduct of all operations in such a manner so as to ensure the Safety of all concerned, compliance of statutory and industrial requirements for environment protection and conservation of natural resources to the extent possible.