Dutron Polymers Ltd Management Discussions.

INTRODUCTION

Dutron Polymers Ltd. was formed to manufacture Plastic Pipes and Fittings, in ISI marked segment of the industry at Dist. Kheda, Gujarat. Today, the Company has been recognized as one of the most reliable quality plastic pipes & fittings manufacturers in India. Its products HDPE, PVC & CPVC pipes and fittings cater to several market areas- agriculture, industries, building, construction and infrastructure projects. The Company is ISO 9001:2015 certified and has been steadily growing its base in all parts of the country, especially in Gujarat and neighboring states.

ECONOMIC REVIEW

The world economy showed some signs of recovery. India saw a major revamping of indirect taxes by introduction of GST. This increased ease of doing business, which showed signs of growth in industrial production and services indicators during the last quarter of the year. This, in turn, is likely to result in strong economy growth during current year.

INDIAS PLASTIC PIPE INDUSTRY

Plastic pipe demand in India has been growing in same line with India‘s economic growth. Plastic pipes are used for Agriculture, Housing, Infrastructure and Industries to carry water air or chemicals. In post GST era, organized plastic pipe suppliers are getting boost. However, building and housing sectors remained stagnant during the year. Yet, plastic pipe manufacturing capacities were added mainly from organized players during the year to cater to higher potential demand in near future. Your Company also installed one new 350 kg/hr capacity PVC pipe plant during the year.

BUSINESS OUTLOOK

During the year, Gujarat Governments water supply schemes enhanced PVC pipe market demand significantly. Your Company was also significantly benefited from it. Sardar Sarovar Narmada Nigam Limiteds water distribution project is likely to continue in current year. This will create huge additional demand of PVC pipes. Dutron has planned aggressive marketing to reach various segments of the markets, particularly in Western India. Addition of PVC pipe capacity by about 1440 MTPA will provide adequate availability of PVC pipes during high demand season. Dutron has been one of the early users of Japans Sekisui CPVC compound - ‘Durastream in India. HDPE pipe market growth largely depends on Agriculture season and Industrial projects. Thus, with Indias economic growth,; we shall see demand for Dutrons HDPE pipes also growing.

OPPORTUNITIESAND THREATS

The Governments various infrastructure spending plans in irrigation, drinking water, affordable housing and Smart City projects will give very good opportunity to your company in next couple of years. Replacement of metal plumbing pipes with plastic pipes are increasing taking place in India. Post GST era will continue to benefit organized plastic pipes manufacturers like your company.

Major risks and threats to your company are related to Global Economic Situation and how India is affected in this. Stagnant building and construction industry is a threat faced by your company.

BUSINESS, OPERATIONAL AND FINANCIAL RISKS

The major risks and concerns which may have impact on Companys business are as follows:

1. Indian Economy and International Economic trends

2. Foreign Currency rate fluctuations

3. Interest rate fluctuations and high rates on inflation

4. Unforeseen circumstances like natural calamities- floods, earthquakes-, closure due to violence

5. Delay in the government spending on infrastructure

Since the company is 100% dependent on import of raw material for CPVC pipes, fluctuations of foreign currency rate affect the most in profitability on CPVC pipes sales. However, it is expected that this fluctuation will decrease due to actions by RBI. Further, Plastic Pipes manufacturing industry is competitive industry and reflects with demand-supply chain. Trusted quality, and customer confidence is directly linked with economic factors like consumer reliance, technology and its upgradation etc.

INTERNAL CONTROL SYSTEMS

The Company has built adequate systems of internal controls towards achieving efficiency and effectiveness in operation, optimum utilization of resources, and effective monitoring thereof as well as compliance with all applicable laws. The internal control mechanism comprises of well-defined organization structure, documented policy guidelines, pre-determined authority levels and processes commensurate with the level of responsibility.

FINANCIAL PERFORMANCE

The highlight of financial performance is discussed in the Directors Report. The Audit Committee also reviews financial performance of the Company from time to time.

HUMAN RESOURCES MANAGEMENT

Dutrons belief in trust, transparency and teamwork has yielded improvement in employee efficiency at all levels. The Companys commitment to harmonious industrial relations resulted in enhancing effectiveness of operations and enabled the achievement of benchmarks in industry. The Companys ongoing objective is to create an inspirational work climate where talented employees engage in creating sustained value for the stakeholders. The Company has developed an environment of harmonious and cordial relations with its employees.

CAUTION STATEMENT

Statements in this Management Discussion and Analysis Report describing the Companys objectives, estimates etc. may be "forward looking statements" within the applicable laws and regulations. Actual results may vary from these expressed or implied; several factors that may affect Companys operations include dependency on telecommunication and information technology system, Government policy and several other factors. The Company takes no responsibility for any consequences of the decisions made, based on such statement and holds no obligation to update these in future.

FOR DUTRON POLYMERS LIMITED
Place: Ahmedabad S. B. PATEL
Date: 9th May, 2018 Chairman