Management Discussion and Analysis Report on the business of the Company as applicable
and to the extent relevant is given below: The statements in the "Management
Discussion and Analysis Report" describe the Companys objectives, projections,
expectations, estimates or forecasts which may be "forward-looking statements"
within the meaning of the applicable laws and regulations. Actual results may differ
substantially or materially from those expressed or implied therein due to risks and
uncertainties. Important factors that could influence the Companys operations, inter
alia, include global and domestic demand and supply conditions affecting selling prices of
goods, availability and prices, changes in government regulations, tax laws, economic,
political developments within the country and other factors such as litigations and
industrial relations.
GLOBAL ECONOMY OVERVIEW
The global economy is going for a gradual recovery from the powerful blows of the
pandemic and of Russias unprovoked war on Ukraine. China is rebounding strongly following
the reopening of its economy. Supply-chain disruptions are unwinding, while the
dislocations to energy and food markets caused by the war are receding. Simultaneously,
the massive and synchronous tightening of monetary policy by most central banks should
start to bear fruit, with inflationmoving back toward its targets. In IMFs forecast,
global growth will bottom out at 2.8 percent in 2023 and would rise modestly to 3.0
percent in 2024. Global inflation will decrease, although more slowly than initially
anticipated, from 8.7 percent in 2022 to 7.0 percent in 2023 and 4.9 percent in 2024.
Notably, emerging market and developing economies are already powering ahead in many
cases, with growth rates jumping from 2.8 percent in 2022 to 4.5 percent in 2023. The
slowdown is concentrated in advanced economies, especially the euro area and the United
Kingdom, where growth is expected to fall to 0.7 percent and –0.4 percent,
respectively, in 2023 before rebounding to 1.8 and 2.0 percent in 2024. (Source: IMFs
World Economic Outlook-2023 APR)
INDIAN ECONOMY OVERVIEW
The Indian economy, however, appears to have moved on after its encounter with the
pandemic, staging a full recovery in FY22 ahead of many nations and positioning itself to
ascend to the pre-pandemic growth path in FY23. Yet in the current year, India has also
faced the challenge of reining in inflation that the European strife accentuated. Measures
taken by the government and RBI, along with the easing of global commodity prices, have
finally managed to bring retail inflationbelow the RBI upper tolerance target. However,
the challenge of the depreciating rupee, although better performing than most other
currencies, persists with the likelihood of further increases in policy rates by the US
Fed. The widening of the CAD may also continue as global commodity prices remain elevated
and the growth momentum of the Indian economy remains strong. The loss of export stimulus
is further possible as the slowing world growth and trade shrinks the global market size
in the second half of the current year. Despite these, agencies worldwide continue to
project India as the fastest-growing major economy at 6.5-7.0 per cent in FY23. These
optimistic growth forecasts stem in part from the resilience of the Indian economy seen in
the rebound of private consumption seamlessly replacing the export stimuli as the leading
driver of growth. The uptick in private consumption has also given a boost to production
activity resulting in an increase in capacity utilisation across sectors. The rebound in
consumption was engineered by the near-universal vaccination coverage overseen by the
government that brought people back to the streets to spend on contact-based services,
such as restaurants, hotels, shopping malls, and cinemas, among others. (Source: RBI
Economic Survey 2022-23)
INDUSTRY STRUCTURE AND DEVELOPMENT:
During the financial year ended March 31, 2023, your Company was mainly engaged into
the wholesale trading of commodities such as yarn and polymer etc.
Polymer
The high volatility and low market prices contribute to reduced business activity and
profitability in the polymer products industry.
In simpler terms, when prices for polymer products are both unstable and low, it can
negatively impact businesses in this industry. This is because the uncertainty and low
pricing can make it challenging for companies to make money and operate effectively.
Yarn
Due to considerable volatility in cotton prices and low demand for fabrics, the yarn
prices fell substantially. In some cases, the traders quoted prices below the contribution
level.
STRENGTH, WEAKNESS, OPPORTUNITIES AND THREATS:
The Company is in the business of trading in commodities for last three decades, which
has made it a well known business house in the market in which the Company trades.
The business of the Company is affected mainly because of intense competition in the
Global Markets.
The major threat would be slow down in the Indian as well as Global Economy or change
in Economic Policies of the Indian Government.
Government Policies:
The Companys business also has a threat of sudden change in government policies like
policies relating to import of certain products, change in customs duty structure, change
in GST rates, etc. The Company monitors the changes in government policies on day-to-day
basis and forms appropriate strategies to mitigate the impact on the Company while
ensuring adequate compliances.
The Company hopes that once volatility in the prices of the commodities becomes stable,
the Company will be able to get good business.
SEGMENT/PRODUCT-WISE PERFORMANCE:
The Companys current business activity has only one primary reportable segment, namely
trading in Commodities such as yarn, polymer, etc.
OUTLOOK:
We are one of the oldest Companies in the field of Yarn & Polymers. Your Directors
are confident and optimistic of generating additional revenues. The demand for this
product will never be in slump due to the sheer size of the Domestic Market.
The Company hopes that once volatility in the prices of the commodities becomes stable,
the Company will be able to get good business.
RISK AND CONCERNS:
Business risk evaluation is an ongoing process within the Company. The assessment is
periodically examined by the Board. Your Company has devised and implemented a mechanism
for Risk management and has developed a Risk Management Policy. The
Policy provides for identification of internal and external risks and implementing risk
mitigation steps. The said Policy is available on the website of the Company
www.ramgopalpolytex.com.
Yarn and Polymer Industry has certain specific set of risk characteristics, which needs
to be carefully evaluated and mitigated. In order to effectively manage the same, the
Company has evolved proactive Risk Management System, which is adhered to. The risk
management covers the entire process from competitors activities, new entrants etc.
This section lists forward-looking statements that involve risks and uncertainties.
1. Our revenues and expenses are difficult to predict and can vary significantly from
period to period.
2. We may not be able to sustain our profit margins or levels of profitability.
3. The economic environment, pricing pressures etc. can negatively impact our revenues
and operating results.
4. Currency fluctuations may affect the results or our operations.
5. Intense competition in the market can affect our pricing.
6. Changes in the policies of Government or political instability could impede
liberalization of the Indian Economy andadversely affect economic conditions in India
generally, which could impact our business and prospects.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has an ideal internal control system in every area of its operations. The
internal control system is commensurate with the size and nature of its business. Further,
the Company has appointed M/s. Ravi Seth & Co. as "Internal Auditors" to
ensure effectiveness of internal control system. The Company mitigate the lapses in
internal control system, if the same are observed by the Internal Auditors.
FINANCIAL AND OPERATIONAL PERFORMANCE:
Financial Results and performance for the year are elaborated in the Directors Report.
HUMAN RESOURCES AND INDUSTRIAL RELATION:
The Companys philosophy is to establish and build a high performing organization,
where each individual is motivated to perform to the fullest capacity: to contribute to
developing and achieving individual excellence and departmental objectives and
continuously improve performance to realize the full potential of our personnel.
Industrial relations are cordial and satisfactory. The employee strength as on March 31,
2023 was 7 (Seven).
The Key Financial Ratios of the Company are given as below:
Sr. No. Particulars |
2022-23 |
2021-22 |
| i. Debtors Turnover ratio (Times) |
8.09 |
24.15 |
| ii. Inventory Turnover (Times) |
2.64 |
6.25 |
| iii. Interest coverage ratio |
(9.65) |
(10.96) |
| iv. Current ratio |
11.26 |
9.55 |
| v. Debt equity ratio |
0.04 |
0.05 |
| vi. Operating margin ratio% |
(16.59)% |
(5.03)% |
| vii. Net Profit Margin |
(18.30)% |
(5.49)% |
Explanations for variation of 25% or more in Key Financial Ratios:
Debtors Turnover ratio decreased due to average trade receivable for the year is higher
than that of previous year.
Inventory Turnover ratio decreased due to decrease in turnover and maintenance of
average inventory.
The changes in interest coverage ratio is due to increase in losses in the Current
year.
Current ratio increased due to impact of decreased in Current Assets and Current
Liability.
Improvement in Debt Equity ratio due to repayment of borrowings.
The changes in operation margin ratio is decreased due to lower selling price than the
purchase cost in the current year.
The changes in Net profitratio is decreased mainly because of lower selling price than
the purchase cost in the current year.
RETURN ON NET WORTH:
Particulars |
2022-23 |
2021-22 |
| Return on net worth (%) |
(9.80)% |
(3.20)% |
Reason for significant change:Return on equity decreased as the Company incurred
huge loss in the current year.
CAUTIONARY STATEMENT:
Some of the statement contained within this Report may be "forward looking"
in nature and may involve risks and uncertainties. The statements are based on certain
assumptions and expectations of future events. The Company cannot guarantee that these
assumptions and expectations are accurate or will be realized. The Companys actual
results,performance or achievements could thus differ materially from those projected in
any such forward-looking statements.
The Company assumes no responsibility to publicly amend, modify or revise any
forward-looking statements, on the basis of any subsequent developments, information or
events.
By Order of the Board of Directors For Ramgopal Polytex Limited
Sanjay Jatia
Chairman & Managing Director (DIN: 00913405)
Place: Mumbai
Date: August 14, 2023
Regd. Office:
Greentex Clearing House, B-1, 2 & 3,Gosrani Compound, Rehnal Village, Bhiwandi,
Thane – 421302.
CIN: L17110MH1981PLC024145 Tel: 22-61396800 Fax: 22-22851085
E-mail Id: rplcompliance@ramgopalpolytex.com Website: www.ramgopalpolytex.com
+91-9892691696
