gloster ltd share price Management discussions

a) Industry structure and developments

The compulsory packing norms for food grains and sugar under Jute Packaging Materials (Compulsory use for Packing Commodities) Act, 1987 (JPMA) stands at the 100% & 20% of production of food grains & sugar respectively and the said notification is valid up to 30th June 2022.

b) Opportunities and Threats/Risks & Concerns Opportunities

- Rising concerns for reducing carbon foot prints opens doors for use of more bio degradable & sustainable products made from natural fibers;

- Demand for Companys industrial products like Hessian & Sacking and promotional Jute goods like lifestyle products & other made ups in particular have grown over the years and is expected to see further growth;

Risk & Concern/ Threat

- Incentives for exports have been reduced substantially on introduction of Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme;

- Restricting Raw Jute Stock to be maintained by jute mills may adversely affect the cost due to improper quality mix;

- Any further dilution of compulsory Jute can adversely affect the market of jute products;

- Stiff competition from Bangladesh jute goods and synthetic packaging materials;

- Withdrawal of Anti Dumping duties on import of jute goods from Bangladesh may adversely affect the domestic market.

c) Segment-wise or product-wise performance

The Company is engaged in the business of manufacturing Jute goods and is managed organizationally as a single unit. Accordingly, the company has only one business. However, the Company has customers in India as well as outside India and thus segment reporting on the Geographical location of its customers is as below:

(Rs in lakhs)

Particulars	Inside India		Outside India		Total
	2021-22	2020-21	2021-22	2020-21	2021-22	2020-21
Segment revenue by location of customers	52,638.08	35,315.51	20,282.18	13,423.80	72,965.26	48,739.31

d) Outlook

The prices of raw jute in the current financial year prevailed higher as sufficient water was not available at the time of retting. Moreover the farmers were also reluctant to sell below the price they got from the last years crop inspite of strict monitoring & stock regulations imposed by the authorities. In the ensuing season the raw jute crop is estimated to be bountiful due to good weather conditions up till now and higher acreages under jute crop. The carry-over of crop in the ensuing season is adequate which should keep the prices stable with downward bias.

Demand from Government, domestic & export markets have been stable and the Company is continuously exploring newer markets for traditional and diversified jute products.

Your management is sustaining its efforts to improve the efficiency and productivity for achieving better performance.

e) Internal control systems and their adequacy

The Company has adequate internal control system commensurate with the size, scale and complexity of its operations which provides reasonable assurance with regard to safeguarding the Companys assets, promoting operational efficiency by cost control, preventing revenue leakages and ensuring adequate financial and accounting controls and compliance with various statutory provisions. An independent Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of internal control systems and suggests improvements for strengthening them.

A summary of Internal Audit observations and Action Taken Reports are placed before the Audit Committee on a periodical basis, for review.

f) Discussion on financial performance with respect to operational performance

The following are the significant areas of financial performance:

(Rs in :akhs)

Particulars	2021-22	2020-21	Increase/(Decrease)
Revenue from operations	73,382.05	49,308.68	24,073.37
Raw material cost	40,718.22	27,906.98	12,811.24
Finance costs	150.74	199.93	(49.19)
Profit for the year	7,281.20	4,460.58	2,820.62

g) Human Resources & Industrial Relations

The Company is continuing its efforts through training to enhance competence of its manpower to make them more resourceful in their present job and also to prepare them for future roles. The Company has also introduced staff welfare schemes under which benefits are provided to deserving members of staff.

h) Key Financial Ratios

Sl.No. Ratio	31 March 2022	31 March 2021
1 Current ratio (Times)	4.14	4.63
2 Debt-equity ratio (Times) *	0.01	0.02
3 Debt service coverage ratio (Times) @	6.37	9.92
4 Return on equity ratio (%)	7.04%	4.65%
5 Inventory turnover ratio (Times) #	5.02	3.66
6 Trade receivables turnover ratio (Times)#	24.04	16.29
7 Trade payables turnover ratio (Times) #	41.41	38.17
8 Net capital turnover ratio (Times) #	3.64	1.80
9 Net profit ratio (%) #	9.98%	9.15%
10 Return on capital employed (%) #	12.58%	8.48%
11 Return on investment (%) #	9.51%	6.01%
12 Interest Coverage Ratio (Times)#	96.61	49.16
13 Operating Profit Margin (%)	15%	13%

* The variation in debt- equity ratio as at 31 March 2022 compared to 31 March 2021 is due to full repayment of long term debt in current financial year.

# The variation in coverage, turnover and other profitability ratios are primarily due to increase in turnover and profitability during the year.

@ On account of higher repayment in 31 March 2022 as compared to 31 March 2021.

i) Cautionary statement

Statements made in this section of the report are based on assumptions and expectations of future events. Actual results could however differ materially from those expressed or implied. Important factors that could make a difference include finished goods prices, raw material cost and its availability, change in Government regulations, tax laws, economic developments within the country, currency fluctuation and other factors such as litigation.