Polymechplast Machines Ltd Management Discussions

> GLOBAL ECONOMY

During the financial year 2023-24, the global economic environment remained uncertain and fragile. The geopolitical crisis in Europe contributed to a surge in global inflation, affecting energy and commodity prices, and prompting central banks in various economies to implement monetary tightening measures. As a result, the global growth outlook was negatively impacted, leading several agencies to revise down growth forecasts for both 2023 and 2024.

The International Monetary Fund (IMF) has reported that the global economy began the year 2024 on a stable footing, with a growth rate of 3.1%. It is projected to further increase to 3.2% in 2025, surpassing the previous forecast. This growth is anticipated to be primarily driven by the unexpected resilience of the US economy, several large emerging markets, and developing economies, along with fiscal support in China.

Despite these positive indicators, potential challenges may arise due to factors such as restrictive monetary policies, the withdrawal of fiscal support, and low underlying productivity growth. It will be crucial for policymakers to carefully navigate these obstacles to ensure sustained economic growth in the coming years.

For India, being a net importing country, the depreciation of the rupee resulted in a higher Current Account Deficit (CAD) and heightened inflationary pressures, adding to the challenges faced during the year.

> Outlook

The global economy has shown signs of improvement compared to a year ago, with the risk of a global recession diminishing, largely due to the strength of the U.S. economy. However, global growth is expected to slow down further this year due to tight monetary policy, restrictive financial conditions, and sluggish global trade and investment. While labour market conditions have improved, unit labour cost growth remains higher than desired for medium-term inflation goals.

Overall, while there are positive developments in the global economy, challenges remain that could impact growth in the near future. Potential risks include an increase in escalating geopolitical tensions, financial strain, ongoing inflation, trade disruptions, and climate-related disasters. It is imperative for global cooperation to address these challenges by providing debt relief, promoting trade integration, combating climate change, and addressing food insecurity.

Emerging market and developing economies (EMDEs), particularly commodity exporters, are facing challenges related to fiscal policy pro-cyclicality and volatility. Effective macroeconomic and structural policies, along with strong institutions, are essential for boosting investment and enhancing long-term prospects across all EMDEs.

The medium-term outlook for many developing economies has dimmed due to slowing growth in major economies, sluggish global trade, and the most stringent financial conditions in decades. Global trade growth in 2024 is projected to be only half of the average seen in the decade prior to the pandemic. Additionally, borrowing costs for developing economies, especially those with poor credit ratings, are expected to remain high as global interest rates remain at four-decade highs in inflation-adjusted terms.

> INDIAN ECONOMY OVERVIEW

One of the fastest growing economies in the world, the Indian economy is anticipated to experience a consistent growth of 6.7% annually from 2024 to 2031, as per the latest report by CRISIL. This projection slightly surpasses the pre-pandemic average of 6.6%. CRISIL attributes this growth trend to capital, highlighting the governments investment-driven approach during a period when the private sector hesitated to make substantial investments. The governments notable increase in capital expenditure, supporting infrastructure projects and offering interest-free loans to states, is identified as a pivotal factor.

As per National Statistical Office ("NSO") the growth in the real GDP during F.Y. 2023-24 was estimated at 8.2% as compared to 7.0% in F.Y. 2022-23. This is driven by the accentuated headwinds from prolonged geopolitical tensions, tightening global financial conditions and slowing external demand.

> INDIAN PLASTICS INDUSTRY

Since its inception in 1957, the Indian plastics industry has witnessed significant growth and expansion. Today, it stands as a prominent sector within the nations economy, comprising over 30,000 companies and employing more than 4 million people. India also ranks among the worlds top exporters of plastic products. These exports include a diverse range of raw materials, laminates, electronic equipment, medical devices, and consumer goods, reaching more than 150 countries, with a firm presence in Europe, Africa, and Asia.

With the potential to emerge as the global plastics supplier, the Indian plastics industry is expected to more than triple to reach Rs. 10 lakh crore by 2027-28 with import substation offering a huge growth opportunity to the industry and with plastics consumption rising at 16% per year, according to the All- India Plastics Manufacturers Association (AIPMA). Considering a rising middle class with low per capita consumption of plastics. This high progress rate is expected to continue, as the per capita consumption of plastics will certainly increase. According to the Government of India, India is the third largest consumer of plastic after USA and China, where almost an average Indian consumes 13 kg annually versus 27 kg globally. Valued at around USD 43.68 billion at the end of 2023, the Indian plastics industry has a growing export presence and has more than 2,000 exporters and exports plastic products to more than 200 countries. India manufactures various products such as plastics and linoleum, houseware products, cordage, fishnets, floor coverings, medical items, packaging items, plastic films, pipes, raw materials, etc. While the country majorly exports plastic raw materials, films, sheets, woven sacks, fabrics, and tarpaulin.

> COMPANYS OVERVIEW

Polymechplast Machines Limited (PML) - a Company promoted and established by expert Group of Technocrats in the year 1978 which was earlier known as PLASTICO engaged in manufacturing of ‘GOLD COIN brand plastic processing machinery. Today with as much as 35 years of rich experience, PML is well known in India and overseas and enjoying good market all over India and abroad as a leading manufacturer and supplier of Injection Moulding and Blow Moulding Machines.

PML has the distinction of being the pioneer and the only successful manufacturer, till date of two & three colour marble effect Injection Moulding Machines in India. Versatile as these machines are, they have revolutionized the plastic industry to a large extent as they can produce varied patterns without any changes in the moulds of single colour machines. These machines are also versatile for producing single colour products too.

PML strives to find better solutions to customer needs. Continuously working towards offering the best in terms of innovation, quality machines & most important is at affordable cost. PML adheres to the business philosophy of Total Quality Products with productivity to give customer satisfaction for their constant progress.

Today, more than 8000 "GOLDCOIN" machines are operational in both national and international markets. Whats more, many of these machines are even working round the clock, 365 days a year. This is an indication of the PMLs commitment to its corporate motto of providing TOTAL CUSTOMER SATISFACTION.

> STRATEGIC GROWTH INITIATIVES AND FUTURE OUTLOOK AT PML Revenue Growth and Market Expansion

• New Markets and Product Portfolio: PML is exploring new markets, enhancing our product portfolio, and leveraging strategic partnerships to accelerate revenue growth.

• Innovative High-Tech Products: The R&D team is developing a new line of high-tech products. The recent launch of IoT-enabled "Protek Series" of Injection Moulding machines, which have received an excellent market response with substantial order bookings from the first month.

Operational Excellence and Profitability

• Increased Efficiency: PML is adopting a system-driven approach to streamline processes, reduce operational costs, and improve overall efficiency.

• Revenue and Profit Growth: Expanding product lines, entering new markets, and enhancing operational efficiency are central to the strategic growth of the Company. The goal of the Company is to increase the share price to Rs. 100 by March 31, 2025.

Innovation and R&D

• Investment in Innovation: PML is hiring more design experts, seeking expert advice from external sources, and forming associations with renowned international companies to boost the image as a technology-driven company.

Diversifying Revenue Streams

• Expanded Offerings: PML is introducing new products and services, such as blow molding, IoT retrofits, and annual subscription models, to generate additional revenue.

• New Markets: Developing an export market strategy to capture international opportunities.

Improving Investor Relations

• Transparent Communication: PML is committed to open and honest communication, providing regular updates on financial performance, business strategy, and future outlook.

• Attractive Dividend Policy: Offering consistent dividends over the last 6 years.

Strengthening Financial Health

• Debt Reduction: Continuously working to lower debt levels and improve financial stability.

• Cost Management: Implementing effective cost management strategies to boost profit margins and investor confidence.

Strategic Acquisitions and Partnerships

• Mergers and Acquisitions: Exploring growth opportunities through strategic mergers and acquisitions.

• Partnerships: Forming alliances with other companies to open new markets, enhance product offerings, and improve competitive positioning.

Market Perception and Branding

• Strong Brand Identity: Focusing on digital and print media branding and engaging with prominent industry associations to build a strong brand.

• Positive Media Coverage: Increasing participation in media events, webinars, and other public platforms to boost investor confidence and interest.

Adopting New Technologies

• Digital Transformation: Leveraging new technologies like digital marketing tools and sustainability initiatives to improve business processes, enhance customer experience, and drive growth.

> LAUNCHNG OF NEW IOT ENABLED PLASTIC PROCESSING INJECTION MOULDING

MACHINES:

Your Company have pleasure to inform that it has also launched new "PROTEK SERIES", which is

High-Tech advanced IOT enabled Injection Moulding Machine. This series comprises of PROTEK 120T, 160T, 200T, 260T (Tonnage Machines) capacity models, providing flexibility to address different operational needs, whether for small-scale production or large industrial applications.

The PROTEK Series machines are engineered to deliver optimal performance across various industrial segments. These machines have cutting-edge technology, robust construction, and advanced features that ensure precision, reliability and efficiency.

Key Features of Our New IoT-Enabled Injection Moulding Machine includes Higher Tonnage, Real-Time Monitoring, Predictive Maintenance, Remote Access, Energy Efficiency and User-Friendly Interface.

The PROTEK Series is a testament to advanced engineering and versatility in industrial machinery. With different capacities, these machines offer unparalleled flexibility and efficiency, making them an ideal choice for a wide range of applications. Whether in the automotive, medical, communication, writing instruments, engineering, furniture, packaging, white goods, or electrical switchgear industry, this PROTEK series machines are designed to meet production needs with precision and reliability.

> SWOT ANALYSIS

Strengths

• Well established brand - Gold Coin

• Ability to retain experienced and trustworthy talent

• Family owned business - faster decisions

• Ability to infuse capital for growth opportunities

• Growth in Injection moldings machine market

• Demand for innovative products

• Govt, support for sustainable products helping environment

• Expansion and growth possibilities in international Markets (3,d World countries and also Europe)

Weaknesses

• Low international market presence

• Domestic market highly fragmented

• Latest technology less integrated in products

• Lack of digital market presence

• Long lead time for product development

Threats

• Intense competition from brands like Milacron (~30% market share), Helium Huayuem, Sumitomo, Husky, Engel etc.

• Dropping margins in the industry

• Govt, regulations (e.g., restriction on single-use bottled effecting demand for blow molding machines)

> COMPANYS FINANCIAL PERFORMANCE

The Companys Board of Directors are responsible for the matters as stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India. The financials have been prepared considering the requirements of applicable laws.

During the financial year 2023-24, the Company recorded a Total Income of Rs. 5,970.50/- Lakhs as compared to Rs. 6,985.09/- Lakhs during the financial year 2022-23.

Profit after tax was Rs. 79.17/- Lakhs for the financial year 2023-24 as against Rs. 154.92/- Lakhs for the financial year 2022-23.

> KEY FINANCIAL RATIOS

As required under SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018, details of key financial ratios are outlined as below:

As per the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018, the Company is obligated to disclose significant changes (i.e., changes including 25% or more compared to the immediately preceding financial year) in key financial ratios, accompanied by comprehensive explanations for such variations. The key financial ratios are outlined as follows:

Sr. No.	Key Financial Ratios	As at 31st March, 2024	As at 31st March, 2023	Variance (%)
1.	Current Ratio (in times)	1.14	1.28	(10%)
2. 3.	Debt-Equity Ratio (in times) Debt Service Coverage Ratio (in times)	0.04 21.63	0.17 8.33	(75%) 160%
4.	Return on Equity Ratio (in %)	3.12	6.27	(50%)
5.	Inventory Turnover Ratio (in times)	4.80	5.29	(9%)
6.	Debtors Turnover ratio (in times)	27.87	31.75	(12%)
7.	Creditors Turnover ratio (in times)	7.76	9.40	(5%)
8.	Net capital Turnover ratio (in times)	26.00	14.11	(145%)
9.	Net profit ratio (in %)	1.34	2.24	(46%)
10.	Return on Capital employed (in %)	5.62	8.34	(52%)

> INTERNAL CONTROL SYSTEMS AND ADEQUACY

The Company has an adequate system of internal controls in place, commensurate with the size and nature of its business for the purchase of inventory, fixed assets and for the sale of goods or services. These controls have been designed to provide a reasonable assurance with respect to maintaining of proper accounting controls for ensuring reliability of financial reporting, monitoring of operations, protecting assets from unauthorized use or losses, compliance with regulations.

> RISKS AND CONCERNS

Risk management is a fundamental aspect of your Companys operating framework. We firmly believe that effectively managing risks is essential for maximizing returns and ensuring sustainable growth.

Our approach to addressing business risks is comprehensive and proactive. We conduct periodic reviews to identify and evaluate potential risks that may affect our operations. By having a well-defined framework for mitigating controls and reporting mechanisms, we can promptly address any identified risks and minimize their impact on our business.

Through a diligent risk assessment process, we appropriately identify and assess threats that may arise within our business environment. We then take necessary actions to address these risks and implement suitable measures to mitigate their potential negative effects.

By prioritizing risk management and actively addressing potential challenges, we aim to safeguard our Companys interests and enhance its resilience in the face of uncertainties. This enables us to pursue growth opportunities confidently while ensuring the well-being of our business and stakeholders.

> HEALTH AND SAFETY

We are committed towards safety of our people and assets and towards the protection of the environment through a variety of initiatives. The Company follows good business practices in health, safety, and environment related aspects to constantly set higher benchmarks and strives to exceed the same. Your Company being involved in the FMCG Industry, dealing with various kinds of essential services, had provided all the essential items. Our employees did take risk to keep our operations going and supplied essential goods to consumers so that the impact of the crisis can be reduced. While every business has its own highs and lows, the success of the Company in longer run depends on its ability to innovate to meet the evolving needs of customers and remain competitive.

> IN FRASTRUCTURE

The offices are well equipped with computer systems, internet connectivity, other communication equipment, security and other facilities which are required for our business operations to function smoothly.

> HUMAN RESOURCES

During the year under review, industrial relations of the Company continued to be cordial and peaceful. We believe that our employees are key contributors to our business success. We focus on attracting and retaining the best possible talent. Our Company looks for specific skill-sets, interests and background that would be an asset for our business. Our employees look after administrative, secretarial, legal, marketing and accounting functions. Our manpower is a prudent mix of the experienced and youth which gives us the dual advantage of stability and growth. Our work processes and skilled / semi-skilled / unskilled resources together with our strong management team have enabled us to successfully implement our growth plans.

> CAUTIONARY STATEMENT

The report may contain certain statements that the Company believes are or may be considered to be "forward-looking statements" that describe our objectives, plans or goals. All these forward-looking statements are subject to certain risks and uncertainties, including but not limited to, government action, economic development and risks inherent in the Companys growth strategy and other factors that could cause the actual results to differ materially from those contemplated by the relevant forward-looking statements.

For and on behalf of the Board
POLYMECHPLAST MACHINES LIMITED
Sd/-	Sd/-
MAHENDRABHAI BHUVA	HIMMATLAL BHUVA
Chairman & Managing Director	Whole Time Director
DIN:00054562	DIN: 00054580
Place: Vadodara
Date: 12-08-2024