Race Eco Chain Ltd Management Discussions.

Business Overview

RACE ECO as the abbreviation suggests Recycling and Circular Economy is an environmentally conscious initiative with a mission to reduce the Carbon footprint caused by waste Plastics. The Company is involved in aggregation of packaging plastic waste and channelizing it for Recycling into Consumer friendly products. The Company is establishing its network by converting existing unorganized Eco chain to organized one.

The complete vertical setup is responsible from the collection and Audit of the waste to the end product to enable Traceability. As an innovative initiative, RACE has built an Artificial Intelligence enabled App to connect the Recyclers with the sellers, for better transparency and ease of doing business in the Industry.

Industry Development

The sale of Plastic waste grew exponentially by more than 500% from 195 MT in November 2020 to 1300 MT in March 2021. In other words, the revenue from Plastic scrap in November 2020 stood at INR 7.1 million which has surged to INR 52.4 million in March 2021, marking a growth of more than 600%. Within a short span of 4 months, The Company have been able to monetize 4600 MT of PET scrap that has generated us revenue of INR233 million.

The recycled division, by selling recycled products under the brand "RESTORE". Companys marketing efforts have been able to arouse huge business interest locally and internationally as a result of which, within a short span of 4 months, RACE have been able to generate revenue of INR 155 million from recycled division with exports accounting a share of 33%.

Due to its unorganized way of working the eco chain is deprived of Investments & Technology and more importantly the Pride of the profession, RACE initiative to convert them to organize chain is creating big opportunity for the eco chain and RACE itself. As per CPCB data the existing market of Plastic waste is around INR 55000 cr per annum (CAGR10 %+), which can grow up to 80K with Technology innervations.

Market Size and Future Outlook

Currently RACE is working closely with 17 Recyclers Pan India with collection network of 57 franchisee associates across map. Going forward RACE intend to create a district-wise pan India collection points. RACE has immense scope of growth as the whole business of INR 55k is in just the initial phase of transforming into Sun shine Industry.

Our company is currently planning to invest its resources to establish and expand its collection network and IT efforts. While the future trajectory remains challenging, we remain confident of the business scenario improving in the short to medium term. By leveraging over 150 years of experience of our founding team and the positive momentum that our business has witnessed so far, we are confident enough to overcome all the challenges and emerge as the industry frontrunner.

Segment-Wise Performance

The Segment wise Company performance is available in segment reporting in financial statement. The Company has no activity outside India. Therefore, there is no geographical segment.

Operational Performance

During the year under review, total income was Rs. 6121.76 Lacs as compared to Rs. 1723.53 Lacs in 2020. Net Sales for the current financial year were Rs. 5871.63 Lacs as compared to Rs. 1582.65 Lacs in 2020. Profit after tax (PAT) stood at Rs. 99.64 Lacs as Compared to Rs. 3.67 Lacs in 2020.

Risk ^Concerns

The Company is mainly exposed to external risks in the form of reduction in value of its investments and fall in returns due to dip in the investee companys performance. The Company is also exposed to the fluctuations of economy and industry cycles / downturns due to COVID-19.

Adequacy of Internal Control System

The Company has adequate internal control systems for the business processes in respect of all operations, financial reporting, compliance with laws and regulations etc. The management information system forms an effective and sound tool for monitoring and controlling all operating parameters. Regular internal audits ensure that responsibilities are executed effectively. The Audit Committee reviews the adequacy of internal controls on regular basis.

Human Resource Development

The Company firmly believes that motivated and empowered employees are the cornerstone of competitive advantage. The Companys employee value proposition is based on a strong focus on employee development, providing a satisfying work environment, performance appraisal and counseling and appropriate empowerment.

The Company continues to maintain and enjoy a cordial relationship with its employees, providing positive environment to improve efficiency with regular investments in upgrading the knowledge and skills of the employees.

Cautionary Statement

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

By Order of the Board of Director
Race Eco Chain Limited
Sunil Kumar Malik
Managing Director
Date: 31st August, 2021 DIN: 00143453
Place: New-Delhi 159 Gag an Vihar East Delhi-110051