MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Overview

During the year 2015-16, the Company’s sales have increased from Rs. 517.40 crores to Rs.626.51 crores showing a growth of 21.09%. The factories at Silvassa, Haridwar, Goa and Guwahati have converted 56614 M.T. of board as compared to 48917 M.T. in the brvious year.

The Company is continuously increasing its clientele and several large multinational companies operating in India are its customers.

Industry Structure and Developments

The year 2015-16 continued to witness growth in the FMCG and other sectors where the Company supplies the packaging material for the last so many years. The rate of growth has been sluggish due to poor monsoon and overall subdued demand. However, with indications of a good monsoon, it is expected that the country return to high rates of growth as in the past. We thus anticipate higher rates of industry growth for consumption in the future, which will auger well for our prospects.

Financial performance

During the year the performance of the Company has substantially increased compared to the brvious year. While the turnover has increased by 21.06% the EBIDTA has also gone up to Rs.100.54 crores as against Rs.82.00crores during the brvious year, an increase of 22.61 %. The cash profit of the Company has also gone up to Rs.80.42 crores in the current year as against Rs. 64.71 crores in the last financial year.

Dividend Policy

The Board of Directors of the Company has adopted the policy of paying out 20% of Net Profit, after taxation, as Dividend each year.

Opportunities

The continuous growth in the economy has created a number of opportunities for your Company for servicing the packaging requirements of the FMCG, food, tobacco, liquor and other consumer product manufacturers. Due to geographical locations of the plants set-up by your Company, it is ideally suited for catering to both the export market as well as domestic market across India.

Threats

There continues to be increase in capacity of packaging manufacturers resulting in over supply coupled with inflation led increases in costs of not only raw materials but also operating expenses. This is a big threat from operating margin perspective. Your Company however mitigates this by continuous increase in productivity and catering to value added products.

Further the company does significant quantity of its business with the cigarette industry which is under constant threat due to increase in taxes levied by both Central & State Governments which impact the overall volume besides the new rule to print with enhanced graphical health warning on the packs.

Segment–wise or product-wise performance

The Company is having only one segment of business i.e. Printing and Packaging

Outlook

The Company’s outlook towards business is promising, mainly due to increasing demand of its products by Customers, increase in export realization and addition of new customers on regular basis. The Company is also in advanced stages of setting up a state of the art plant to manufacture flexible packaging materials, which should contribute significantly to the growth in the coming years.

Risk and Concerns

The Company being a manufacturer of packaging materials is always exposed to the general risks such as government regulations and policies, statutory compliances, etc. The Company from time to time identifies the risk and has put in its place appropriate measures for mitigating such risks.

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 a qualified Audit Committee, independent Statutory Auditors and also Internal Auditors 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 1323 employees are on the Company’s payroll as on 31stMarch, 2016 as compared to 1092 employees on the Company’s payroll as on 31st March, 2015.

Disclosure of Accounting Treatment

In the brparation of Financial Statement for the Financial Year 2015-16 treatment as brscribed in the Accounting Standard has been followed.

Investment Allowance

The provision for tax during the year has been made considering the claim of deduction of Rs.6.96 crores as per section 32AC (1A) of the Income Tax Act, 1961, as introduced by Finance (No.2) Act, 2014 on investment made by the Company in new assets acquired during the year under review.