Captain Pipes Ltd Management Discussions

1. INDUSTRY OUTLOOK:

During the period under review economy was growing very fast. There was tremendous potential growth of these. As ours is the agriculture-based products, there is lot of potential demand for the next years.

2. OPPORTUNITIES AND THREATS:

The company envisaged remarkable growth over previous years. Companys turn over shows increasing trends due to expansion. Government is providing various incentives to agricultural industries. Also, company has initiated solar and green house activity, for which also many governments assistance is available. At the same time, there is intense price pressure from the competitors and international financial crisis. Due to almost three decades experience in manufacturing and international marketing, the Customers also growing rapidly. We have always maintained high quality standard and also make a good track record.

3. INITIATIVES:

The initiatives are being taken by the Company for improving the quality standards and reduction of costs at appropriate level. Machineries were properly installed to provide better result and to cope up with changing requirement of the industry. The employees at all levels are being made aware of the changing conditions and the challenges of the open market conditions and to train the personnel to tackle the difficult situations which will improve the overall productivity, profitability. Also, initiatives were taken by company to direct touch with customers and also providing them quality services and knowledge.

4. RISKS AND CONCERNS:

Fluctuation in the raw material price and stringent market conditions can affect the companys performance. Product risk, risk of fluctuation in the raw material price, government policies, and financial risk can affect the company, which requires continuous follow up.

5. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

During the year under review on standalone basis company has total revenue of Rs. 7773.11 lakhs as against the previous year turnover of Rs. 7674.92 lakhs which shows increase of 1.27% in comparison with the previous year. Profit before tax decreased by 33.02% as compared to previous year. The net profit after tax of the company is also decreased by 33.25% as compared to previous year. During the year under review on consolidated basis company has total revenue of Rs. 7773.11 lakhs as against the previous year turnover of Rs. 7674.92 lakhs which shows increase of 1.27% in comparison with the previous year. Profit before tax decreased by 22.03% as compared to previous year. The net profit after tax of the company is also decreased by 20.23% as compared to previous year.

6. PERFORMANCE SNAPSHOT:

Significant financial highlights in F.Y. 2025-2026 are as follows: -

Key Financial Ratios

Reasons for Variances

1. The decrease in the Current Ratio is mainly attributable to increase in secured current maturities of long-term borrowings, trade payables, and advances from customers during the year.

2. The increase in Total Debt during the year is mainly due to the availing of additional long-term borrowings for financing the establishment of the new manufacturing facility.

3. The decrease in ratio due to significantly increase finance cost as long term borrowing increase for new manufacturing facility.

4. The decrease in Profit After Tax (PAT) during the year is primarily attributable to higher finance costs and increased depreciation expenses arising from borrowings availed for capital expansion projects.

5. The decrease in Net Profit during the year is primarily attributable to higher depreciation and finance costs following the commencement of commercial production at the Companys new manufacturing plant in May 2025. The capitalization of project assets resulted in increased depreciation charges, while borrowings availed for the project led to higher interest expenses during the year.

6. The decrease in ROCE is mainly due to an increase in capital employed arising from investments in the new manufacturing facility, while the corresponding increase in operating profits has not yet fully materialized.

7. SEGMENTWISE OR PRODUCTWISE PERFORMANCE:

The major and material activities of the company are restricted to only one geographical segment i.e. India, hence the secondary segment disclosures are also not applicable. There is no separate segment or product.

8. INTERNAL FINANCIAL CONTROL (IFC) SYSTEM AND THEIR ADEQUACY:

The Company has implemented and evaluated the Internal Financial Controls which provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes and policies, safeguarding of assets, prevention and detection of frauds, accuracy and completeness of accounting records. The Internal Audit Reports were reviewed periodically by Audit Committee as well as by the Board. Further, the Board annually reviews the effectiveness of the Companys internal control system. The Directors and Management confirm that the Internal Financial Controls (IFC) is adequate with respect to the operations of the Company. A report of Auditors pursuant to Section 143(3) (i) of the Companies Act, 2013 certifying the adequacy of Internal Financial Controls is annexed with the Auditors report.

9. HUMAN RESOURCES:

Your Companys Industrial relations continued to be harmonious during the year under review. Employees form the greatest source for any companys success and growth. They are evaluated based on their strengths, potential to achieve and determination to grow head. Learning and being innovative is a very important aspect for every employee and the company recommends employees to continue learning from within the companys framework by contributing and constantly exploring new innovative ideas for the upliftment of the organization. Our company has employed more than 60 employees in the department working since long time. Company provides various facilities to all the employees of company.

It is the belief of the management that it is very important to motivate the employees and encourage them to take decisions and initiatives towards the betterment of their work. The Company encourages and provides them a safe and motivating work environment. Furthermore, various training and educational seminars and events are organized with proper emphasis given on health and safety issues. The Company has always followed process of appraisal from time to time, to recognize talents and ensure that employees remain devoted to the organization for a long term.