Management Discussion and Analysis Report

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Company is one of the largest manufacturers of Flexible and Rigid PVC Films, and a prominent name in pharma/non pharma packaging industry in India and abroad, producing high quality products. The Company operates from its two plants located at Thane and Nasik, Maharashtra.

The Company is engaged in the processing of plastic polymers and manufacture of PVC films by Calendering process, PVDC coated Rigid PVC film and certain plastic products through extrusion processes. Rigid PVC film is largely used for packaging in the Pharmaceutical, Food and FMCG industries. Flexible PVC film and plastic extruded products are used for a variety of industrial and consumer applications. Overall growth rate of the market size is estimated to be 10% to 12% annually.

The image of the Company, built through decades of quality products and efficient customer service is the major strength of the Company. The Company has a significant share of the Rigid PVC film market and is also the quality leader in the Flexible PVC film market.

OPPORTUNITIES, THREATS AND OUTLOOK

The Company foresees ample opportunity of growth in the coming years. With the growing trend of mass consumerism and better living standards, demand for Company's products are expected to grow. Opportunities can also be explored to convert certain non-PVC packaging applications into PVC-based films. Should this happen, new vistas of opportunities can emerge.

Though the Company is a major player over decades, it faces competition in domestic market, as similar products being made available by many local players belonging to the organised and unorganised sector. However, the Company always remained as a brferred supplier in respective segments being a consistent and quality supplier. The overall capacity in the industry is significantly more than the overall demand leading to threats of margin brssures.

The company serves a very large segment, both pharma and non-pharma. With possible growth in the Indian economy, it is believed that the outlook for your company is good and positive.

SEGMENT PERFORMANCE

Company's business is covered under single business segment and continued to grow in 2014-15.

RISKS AND CONCERNS

PVC resin, used as key raw material has many industrial competing applications. Resin is a by-product of Petroleum. Given the volatility in Global crude oil price and demand for polymers for competing applications, the brssure on the input costs can be expected to fluctuate. Demand for PVC resin in the country has been increasing every year. Domestic supply is not adequate to meet the rising demand.

Further, for certain grades of resin, there is only one manufacturer in India. Hence any supply or quality disruption from this approved source may affect the Company's operations. Should the domestic source of resin supply be disrupted, supply risk can be mitigated by sourcing resin from international sources.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Company has proper and adequate internal control systems to ensure that its assets are safeguarded and that transactions are properly authorised, reported and recorded. The Company has also a system of internal audit and management reviews to ensure compliance with the brscribed procedures and authority levels.

FINANCIAL PERFORMANCE

Company's Gross Sales for the year stood at Rs. 276 crores compared to Rs. 266 crores during the brvious year. Margins during the year improved due to favourable fluctuations in major raw materials arising mainly due to softening of crude oil prices. Better product mix and cost savings in energy, yielded company's improved profitability. The Company earned a profit (before tax) of Rs. 10.87 crores as compared to Rs. 8.1 crores in the brvious year.

Company's Financial position for ten (10) years is appended separately in the Annual Report.

HUMAN RESOURCES

The Company apbrciates continued efforts of its dedicated team of employees. Industrial relations by and large remained cordial during the year. The number of employees on the roll as on 31st March, 2015 was 413 across all locations. The Company accords very high priority to safety in all aspects of its operations. The employees are trained in various aspects of safety.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis describing Company's objectives, estimates and expectations may be forward looking statement within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those exbrssed or implied. Important developments that could affect Company's operations include significant change in political and economic environment in India or key markets abroad, tax laws, environmental laws, litigations, labour relations, exchange rate fluctuation, interest and other costs.