Polyspin Exports Ltd Management Discussions

OF THE OPERATION, CURRENT TRENDS AND FUTURE PROSPECTS:

COMPANY PERFORMANCE

During the year, the performance of your Company was satisfactory. The turnover has decreased from Rs.212.60 Crores to Rs. 206.11 Crores due to slowdown in USA Market, the fluctuation in International raw material prices and the operations of Textile Division closed from June 16, 2023. The table below shows comparative quantitative figures of production and sales of the Companys products.

PRODUCTION AND SALES

Quantity of Production and Sale of the Companys Products

i.e., FIBC Bags and OE Spinning Yarn for the year ended 31.03.2024 and 31.03.2023 are as follows:

Multifilament Yarn**

Out of 9,70,739 Kgs. of Multifilament Yarn produced, we have captively consumed 9,28,513 Kgs. for FIBC bags production.

FIBC BAGS DIVISION

The FIBC Division has registered a Turnover of Rs.198.62 Crores as against Rs.205.17 Crores of the previous year due to slowdown in USA Market and the fluctuation in International raw material prices. The FIBC Market is highly competitive with a large number of global and regional players competing on factors such as product quality, innovation, price, distribution network and customer service.

The Strength of FIBC market are cost effective packaging solution, versatile & customizable design, wide range of applications & end use industries and FIBC bags are lightweight, durable & easy to handle. The weakness are depending on the raw material prices & its availability, compliance with regulatory standards & certifications, limited product differentiation & brand recognition and vulnerability to market fluctuation & slowdown.

The opportunities are technology advancement, product innovation, sustainability initiatives & eco-friendly solutions and strategic partnership & collaborations. The threats are fluctuation in raw material prices, intense competition from alternative packaging solutions, regulatory compliances & quality assurance requirements and economic downturns & geopolitical uncertainties.

The FIBC Market size is estimated at USD 5.14 billion in 2024, and is expected to reach USD 7.22 billion by 2029, growing at a CAGR of 5.81% during the forecast period (2024-2029).

The FIBC Market is expected to witness steady growth in the coming years driven by increasing demand from end-use industries such as agriculture, chemicals, construction, food and beverages, pharmaceuticals and logistics. Factors such as globalization, urbanization, infrastructure development and the shift towards sustainable packaging solutions are expected to drive market expansion. However, challenges such as raw material price volatility, regulatory compliance and competition from alternative packaging solutions may pose constraints to market growth. Continued investment in innovation, sustainability, digitalization and partnership are essential for industry participants to stay competitive and capitalize on emerging opportunities in the evolving FIBC market landscape.

With the continuous efforts towards strengthening the operational efficiency and cost control through the various measures such as erection of Solar Power Plant, Standardization of supply chains and other decisive internal measures, the Company is optimistic about the better financial performance in the forthcoming financial years.

OPEN END SPINNING DIVISION

The textile division has registered a Turnover of Rs.10.26 Crores as against Rs. 33.20 Crores of the previous year. On June 16, 2023, the Company has temporarily stopped the production of spinning division considering the unremunerative sale price of yarn and continuous increase in raw material prices. Subsequently, the Board of Directors at their meeting held on August 14, 2023 has approved the permanent closure of operations of this division considering the following factors persist in the past several years.

1. Market conditions are not favorable

2. Unremunerative selling price of yarn.

3. Unpredictable frequent increase in Rawmaterial prices, but no increase in selling price of yarn.

4. The performance of the division was not satisfactory.

The above factors making unviable to run the division. The Land and Buildings are currently used for phased expansion of FIBC Division. Also, the Company is in the process of selling Machineries and other movable assets of this division and is expected to complete by September 2024.

SOLAR PLANT

During the year, the Company has installed the 1.304 MW (1304 kWp) Roof Top Solar Power Plant at FIBC Division at the cost of Rs.5.78 Crores with an intent to reduce the power cost through Captive Consumption. The Solar Panels started generating powers from April 2024 onwards. The full benefits of this investment will be seen from the financial year 2024-25.

FINANCIAL PERFORMANCE (Rs.in Lakhs)

The figures of financial year 2022 - 2023 includes the details of discontinued operation (Textiles Division) during the current financial year .The Published figures of Financial year 2023 have been re-presented for the financial Reporting requirements to show the comparative results of discontinued operation as a separate line item in the Statement of profit and Loss account as required by IND AS-1

KEY FINANCIAL RATIOS

In accordance with Schedule V (B) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Key Financial Ratios for the financial year 2023-24 are given below.

There have been significant change (i.e. 25% or more) in the following ratios.

- For Serial No.3, 6, 7, 9 and 10 due to lower revenue and profitability.

- For Serial No.8 due to significant reduction in revenue from operation.

SOURCES OF FUNDS Own Funds

The Companys Net Worth has decreased to Rs.5,142.67 Lakhs as on 31st March, 2024 as against Rs.5,325.41 Lakhs of the previous year.

Equity

The Companys equity comprises 1,00,00,000 equity shares with a face value of Rs.5 per share, with Promoters holding of 47.79 % as on 31st March, 2024.

Book Value

The Book Value of shares as on 31st March, 2024 is Rs.51.43 per share.

Other Equity

The Companys other equity decreased to Rs. 4,642.67 Lakhs as on 31st March, 2024 as against Rs. 4,825.41 Lakhs of the previous year. Free reserves constitute 100% of the other equity.

Long Term Borrowings

The Companys Long Term borrowings stood at Rs. 2,599.90 Lakhs as on 31st March, 2024, compared to Rs. 1,851.66 Lakhs of the previous year as detailed below.

(Rs.in Lakhs)

APPLICATION OF FUNDS Gross Block

The Companys Gross Block of Fixed Assets increased to Rs. 9,537.11 Lakhs as against Rs. 8,436.82 Lakhs of the previous year.

RISK MANAGEMENT

The Company has robust management architecture. The Company identifies categories, maps mitigation strategies and monitors potential risks. The strategies are drawn up considering potential risks within the short / medium / long term outlook: