Polymechplast Machines Ltd Management Discussions.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Globally, Indian Plastic Industry exported about US $ 449.72 millions in 2015 comprising of about 2000 Exporters. On domestic front, size of the plastic industry was about Rs. 1.02 lakh crore. Indian Plastic Industry has been witnessing tremendous growth of about 13% annually since around last five years and similar growth rate is expected to continue.

OPPORTUNITIES

As against per capita consumption of 28 kg in the world, per capita consumption of plastic in India is 11 kg only. Thus India has big potential to grow. Slowly, but steadily plastic consumption is increasing in India. Your Company is presently manufacturing plastic processing machinery up to 450T capacity and the Company has developed 650T machine and successfully launched this year. Higher capacity machines have better margin and marketing prospects. It would add to the goodwill of the Company also.

THREATS

Globally and domestically, plastic processing machineries industry is prone to cut throat competition. China poses competition to the Indian Plastic Processing Machineries Industry with lower cost and good quality. Overseas countries like Taiwan, Korea and other European countries equipped with latest technology pose the competition on quality front with variety of features.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Company has been operating mainly in the one segment of plastic processing machines engaged in manufacturing and trading.

OUT LOOK

Over 30,000 plastic processing units, 85.90% of them being small and medium sized enterprises, employ about 4 million people. Govt. of India also encourages the industry as it helps in generation of employment. Your Company is also poised for constant upgradation in the quality of its products in order to offer the quality products at par with international standard.

RISK & CONCERNS

Weakening rupee against dollar and volatility in the cost of raw materials have made imports costlier. Increasing cost also blocks export in view of availability of products in the overseas market at competitive prices. Ban on using plastic in some states as well as natural calamities like bad monsoon are also risk factor on which the Company has no control. It would also exert pressure on margin.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has an adequate system of Internal Control and checks supported and monitored by well developed Management Information System to ensure and every business transaction is carried out effectively and efficiently as per laid down procedure and appropriately delegated authority.

The Company also has a system of Annual Business Plan including budged and signification variation for the annual plan and budget are reported on quarterly basis to the Board through the Audit Committee.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the year under review, total income of Rs. 5480.91 lacs as against Rs. 4864.85 lacs in the previous year exhibits growth of about 12.66%. Net profit of Rs 219.42 /- as against Rs 123.68 in the previous year has grown by about 77.41% which can be mainly attributed to reduction in finance cost.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER O PEOPLE EMPLOYED

The Company has been organizing various seminar & workshop on Personality development for increasing productive efficiency of the workers.

These seminars have helped the employees of the Company in achieving the higher efficiency leading to achievement of organizational goals of the Company as a whole.

It has also created an environment of proximity and mutual understanding among the employees in the Company apart from morale boosting. Resultantly, industrial relations remained cordial throughout the year. The Company had 116 employees including apprentice during the period under review.