Rajasthan Cylinders & Containers Ltd Management Discussions.

The Management presents its analysis report covering performance and outlook of the Company. The report has been prepared in compliance with corporate governance requirements as laid down in the listing agreement. The management accepts responsibility for the integrity and objectivity of the financial statement. However, investors and readers are cautioned that this discussion contains certain forward looking statements that involve risk and uncertainties.

1. INDUSTRY STRUCTURE AND DEVELOPMENT

During the year 2018-19 the working of the Company has suffered due to lower orders from the Oil Marketing Companies (OMCs) and it incurred losses before depreciation.

2. OPPORTUNITIES AND THREATS

The Companys manufacturing unit is situated at Jaipur.

Company is expecting good orders in the second half of current financial year as Central Government has decided to provide the gas connection in the rural India. Further the orders for cylinders were on lower due to parliament election and we expected that company is likely to get good orders under new tenders floated by the OMCs.

However, the technology up-gradation and propose use of alternate material for LPG cylinders alongwith supply of LPG through pipelines are the challenges to the Cylinders manufacturer. The location disadvantage of the manufacturing unit at Jaipur result into increased freight component on HR Coils also having a bigger challenge for the Company. Further delay in implementation of GST is affecting the Net realization price of Companies end products.

3. PERFORMANCE

The Performance of the company during the year is as under: -

(Rs. /Lakhs)

PARTICULARS 2018-19 2017-18
PBDAI (313.51) 41.39
PAD (377.88) (14.50)
PAT (258.13) (26.92)

4. OUTLOOK

The company expect to get good orders in second half of financial year 2019-20 against the tender floated by the government. There is delay in the floating of tender by OMCs due to parliament election.

5. INTERNAL CONTROL SYSTEM

The Company has adequate internal control system to safeguard the companys assets from any loss or damage, to control cost, prevent revenue loss and required financial and accounting controls and to effectively implement the applicable accounting standards.

6. RISKS AND CONCERNS

The management continues to monitor the risks concerning the company and take actions as appropriate to the situation.

7. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLEEMPLOYED

As on March 31, 2019 the company had 25 permanent employees at its manufacturing plants and administrative office.

We believe that people are the most valuable assets of the company as they contribute significantly to the achievement of business objectives. During the year, various HR measures were taken to make the HR policies up to the required business needs. The Company has strong and dedicated team of employees and they have shown commitment, competence and dedication in all area of business.

8. i. Details of significant Changes (i.e. change of 25% or more as compared to immediately previous year) in key financial ratios, alongwith detailed explanations therefore :-

Ratio 2017-18 2018-19 Change(%)
Debtors Turnover Ratio 10.17 16.43 61.55
Inventory Turnover Ratio 6.85 6.58 -3.94
Interest Coverage Ratio 0.89 -2.16 -342%
Current Ratio 1.80 1.68 -6.66
Debt Equity Ratio 0.84 0.96 -14.20
Operating Profit Margin 1.71 -4.81 -381.29
Net Profit Margin -0.46 -4.81 9.45

ii. Detail of any change in Return on Net Worth as compared to immediately previous financial year alongwith detailed explanations thereof :-

The return on Net worth during the year is (-) 11.61% as compared to (-) 1.07% in previous year. The return of net worth has decreased mainly due to higher losses during the year due to lower sales and increase in operational cost.

8. CAUTIONARY STATEMENT

Statement in this Management Discussion and Analysis Report describing the Companys objectives, estimates etc. may be "forward Looking Statement" within the applicable laws and regulations. Actual results may vary from these expressed or implied; several factors that may affect Companys operations include Raw Material prices, Government Polices and several other factors. The Company takes no responsibility for any consequences of the decision made, based on such statement and holds no obligation to update these in future.