Pithampur Poly Management Discussions


Forward - Looking Statement

This Report contains forward - Looking Statements. Any statement that addresses expectations or predictions about the future, including but not limited to statements about the Companys strategy and growth, product development, market position, expenditures and financial results, are forward looking statements. Forward looking statements are based on certain assumptions and expectations of future growth. The Company cannot guarantee that these assumptions are accurate and 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 forwardlooking statements, on basis of any subsequent developments, information or events.

Industry structure and developments

The COVID-19 pandemic and consequent nationwide lockdown measure implemented since March, 2020 has worsened the prospectus across manufacturing, service and agriculture industries in India.

Comment on Current years performance

Your Company faced huge financial distress in the financial year 2020-21. The major problem of the company started when Honble NCLT through their order dated 3rd January 2020 have discontinue the present Board of Directors of the Company and appointed Insolvency Resolution Professional (IRP) to start insolvency proceeding.

Putting limelight on the working of the Company in FY 2020-21, in such a rugged environment, the Companys has no business activities during the year.

Opportunities and outlook

Pithampur Poly is among the few HDPE/PP manufacturing companies across the world who are perpetually focusing on its products quality, durability, designing and satisfying end user requirement aptly. Nearly 65% of Companys product portfolio comprises of high-end bags for food, chemical and pharma industries and thus commands premium realisations in the export market. The Company is likely to benefit from the growth opportunities in the top three regions—America, Europe and Asia Pacific. Moreover, its well-placed to address the growing demand in the domestic market.

The order of the Honble NCLT to start insolvency proceeding have been set aside by NCLAT through their order dated 13th August 2020 and allowed the Board of Directors of the Company to function independently.

Segment wise performance

The business of the Company falls under a single segment i.e. "manufacturing and trading of HDPE/PP products" for the purpose of Accounting Standards AS-17.

Risk and concerns

Operating margin remains susceptible to fluctuations in the prices of key input i.e. polymer, which move in tandem with crude oil prices. Also, we are subjected to foreign currency exchange rate fluctuations which could have impact on results of operations. However, this is hedged by executing forward contracts, thereby mitigating forex rate fluctuation risk.

The industry is fragmented because of low entry barrier as capital and technology requirements are limited, gestation period is small and raw materials are easily available. This restricts substantial scale up in operations and exerts pricing pressure. Also, this industry being highly labour intensive the retention of workers has been high priority for the Company. Attrition of workers may affect the production and also involves cost and time in inducting and training of new appointees. Several other global as well as Indian economic and political factors that are beyond our control may affect the business of the Company.

Internal control system

The internal control system has been found to be adequate. This is reviewed periodically by the Audit Committee and statutory auditors of the Company.

Cautionary Statement

Statements in this Management Discussion and Analysis Report, Describing the Companys outlook, projections, estimates, expectations or predictions may be "Forward looking Statement" within the meaning of applicable securities laws or regulations. Actual results could differ materially from those expressed or implied.