Aik Pipes & Polymers Ltd Management Discussions

Pursuant to SEBI (LODR) Regulations, 2015, your directors have the pleasure in presenting the Management Discussion and Analysis Report for the year ended on March 31, 2024.

Industry Overview:-

The plastics and polymers industry stands as a cornerstone of modern economies, catering to diverse sectors such as packaging, construction, automotive, electronics, and healthcare. Its significance lies in the versatility, durability, and cost-effectiveness of its products, driving demand across global markets. India is increasingly integrated into the global plastics market, both as a consumer and producer. The country exports a range of plastic products and imports specialized polymers and additives to meet domestic demand.

India has a well-developed manufacturing base for plastics and polymers, encompassing polymerization, compounding, extrusion, injection molding, and blow molding processes. The Indian government has also implemented policies and initiatives to support the growth of the plastics industry.

High-Density Polyethylene (HDPE) is a versatile polymer that holds a prominent position within the plastics and polymers industry. HDPE finds extensive use across various industries. In packaging, it is utilized for bottles and containers. In the infrastructure sector, HDPE pipes are preferred for their corrosion resistance and flexibility in areas like water distribution, gas distribution, sewerage management and telecommunication. It is also used in geomembranes for environmental containment applications and in the automotive industry for fuel tanks and exterior trims.

Moreover, HDPE is considered a relatively environmentally friendly plastic compared to others, as it is recyclable and can be reused in various applications. Efforts are ongoing to increase recycling rates and develop technologies for utilizing recycled HDPE in new products, contributing to sustainability goals.

The future of the plastics and polymers industry in India looks promising, driven by ongoing technological advancements, investments in research and development, and a growing emphasis on sustainable practices. Innovations in bio plastics, recycled materials, and circular economy models are expected to shape the industrys trajectory.

Company Overview:

Driven by a passion for engineering solutions AIK PIPES is one of the fastest growing and leading companies in its segment. Specializing in the production of a wide and comprehensive range of HDPE (High Density Polyethylene) Pipes, MDPE (Medium Density Polyethylene) Pipes and PPR (Polypropylene Random) Pipes facilitating various segments such as Water distribution, Agriculture, Housing and Infrastructure, Telecommunication, Gas transmission, and Sewerage system. We are equipped with major ISO certifications for ensuring the quality, environmental sustainability, energy efficiency, occupational health such as ISO 9001:2015, ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, ISO 50001:2018 and Bureau of Indian Standards (BIS).

Our Company was originally incorporated on September 19, 2017 as “AIK Pipes and Polymers Private Limited.” under the provisions of the Companies Act, 2013 with the Registrar of Companies, Central Registration Centre. Subsequently our Company was converted into Public Limited Company and name of company was changed from “AIK Pipes and Polymers Private Limited” to “AIK Pipes and Polymers Limited” vide fresh certificate of incorporation dated June 19, 2023 issued by the Registrar of Companies, Jaipur.

AIK PIPES deploys the best in global technologies and fulfils the emerging needs across sectors with the hallmark of unbeaten quality and sustainable solutions. We have invested in a state-of-the-art manufacturing facility that operates in line with the latest industry advancements. At AIK Pipes, we believe in rigorous quality control, with focus on sourcing best quality raw materials across the globe and have established advanced R&D lab to ensure superior quality products. AIK Pipes & Polymers Limited is proud to manufacture and market its products under the renowned brand name "AIK Pipes." Our brand “AIK” has become synonymous with quality and reliability.

In a dynamic world where demands are ever-increasing, AIK Pipes is, a testament to commitment for producing high-quality pipes to meet industry standards and customer expectations. We are committed towards providing piping solutions for various sectors such as EPC projects, drinking water supply, irrigation & other infrastructure projects to meet the ever-increasing demands of growing India.

Financial Performance:

Our revenues from operations for the fiscal year ended 2024 were 37,27,24,736.07 (Rs. Thirty Seven Crore Twenty Seven Lakhs Twenty Four Thousand Seven Hundred Thirty Six) as compared to previous fiscal year ended 2023 were 30,48,23,019.95 (Thirty Crores Forty Eight Lakhs Twenty Three Thousand Nineteen) .

That the company is exploring the new opportunities in the market for its business and your directors are taking all the necessary steps for accelerating the growth of the company. The Company will endeavour to strive to reach new heights and will toil towards attaining high profits.

Our Competitive Strengths:

Enhance customer base by entering new geographies to establish long-term relationships Experienced Promoters and a well-trained employee base Strong Balance Sheet and Financial Condition High-quality at competitive prices Improved operational efficiencies Leveraging our Market skills and Relationships

Threats:

Market trends making other assets relatively attractive as investment avenues Short term economic slowdown impacting investor sentiments and business activities Market & Economic condition, Logistics and transportation Increased intensity of competition from local and global players

Segment-Wise & Product-Wise Performance:

The Company at present is engaged in the Business of Manufacturing of HDPE Pipes. In view of above, primary and secondary reporting disclosures for business/ geographical segment as envisaged in AS 17 are not applicable to the Company. The Highlights of the Companys performance is as under:

37,27,24,736.07 (Rs. Thirty-Seven Crore Twenty-Seven Lakhs Twenty-Four Thousand Seven Hundred Thirty-Six) as compared to previous fiscal year ended 2023 were 30,48,23,019.95 (Thirty Crores Forty Eight Lakhs Twenty Three Thousand Nineteen) and earned a net profit of 34116219.06/-

Future Outlook:

The Company is looking for the new Business opportunities to give the best to stakeholders of the Company. The outlook for the Company appears bright on a long-term basis. The Company is hopeful that its performance in the years to come would be encouraging, as the Company is planning to enter into new segments. Your Company will endeavour to maintain and enhance its position in the furniture market.

Risks and Concerns:

Every Company is prone to internal and external risks, including risks around compliance, operational, strategic and many others. Many of these risks are inherent in the enterprise structure of any organization and may interfere with an organizations operations and objectives. Further as our Company is looking for the new Business opportunities the Following Risk associate for doing any business:

Market Risk Reputation Risk Competition Risk Technological Risk

Changes in the policies of the Government of India or political instability may adversely affect economic conditions in India generally, which could impact our business and prospects. New and changing regulatory compliance, corporate governance and public disclosure requirements add uncertainty to our compliance policies and increase our costs of compliance.

The board of directors also reviewed the key risks associated with the business of the Company, the procedures adopted to assess the risks, efficacy and mitigation measures.

Internal Control Systems:

The Company has adequate internal control systems for the business processes in respect of all operations, financial reporting, compliance, with laws and regulations etc. The management information system forms an effective and sound tool for monitoring and controlling all operating parameters.

Internal check is conducted on a periodical basis to ascertain the adequacy and effectiveness of internal control systems. The system also helps management to have timely data on various operational parameters for effective review. It also ensures proper safeguarding of assets across the Company and its economical use.

Material development in human resources/industrial relations front, including number of people employed:

Industrial relations continue to remain cordial during the year and estimated around 29 employees are on the Companys payroll as on 31^st March, 2024 as compared to 14 employees on the Companys payroll as on 31^st March, 2023.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefore:

*Reasons for Variation more than 25%:

1. The Increase in Current Ratio is mainly due to increase in Trade Receivables and Other Current Assets (i.e FDs issued for short term).

2. The Decrease in Debt Equity ratio is due to Issue of new equity shares in the Market (i.e IPO).

3. Increase in Debt Service Coverage Ratio is due to increase in Profits.

4. Return on Equity is decreased Due to increase in Shareholders Funds during the year due to IPO.

5. Trade Receivables Turnover Ratio is decreased due to increase in Trade receivables at year end.

6. Net Capital Turnover has also reduced due to Increase in Current Assets

7. Net profit Ratio increased due to increase in Net Profits During the year

8. Return on Capital Employed decreased due to increase in share capital during the year