polymechplast machines ltd Management discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

Demand for its products/ services :

There has been some loss of demand of goods in the market as the company manufacture capital good items. However, we expect that the demand of goods will gear up and within 3-4 months we expect that we will be at our targets.

The company is ready to serve plastic furniture moulding sector, Automobile Industrial Sector, Household products sector medical sector, Electronics Sector and Toys Sector, disposable food containers decorative items etc. The Company had entered mobile accessories manufacturing industry and continues in gaining profit out of it over and above existing market.

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 last 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 4million 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 your company earned total income of Rs. 6985.09 Lakhs and net profit of Rs. 154.92 Lakhs against Rs. 8393.23 Lakhs and Rs. 347.14 Lakhs in the previous year which can be mainly attributed to challenging market conditions.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF 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.

KEY FINANCIAL RATIOS

Sr. No Particulars	March 31, 2023	March 31, 2022
1 Debtors Turnover Ratio	31.75	39.28
2 Inventory Turnover Ratio	3.93	5.18
3 Current Ratio	1.31	1.20
4 Long Term Debt Equity Ratio	0.17	0.21
5 Return on Net Worth	6.10	14.27
6 Operating Profit (EBITDA)	4.91	7.09
7 Interest Coverage Ratio	6.00	13.81