rajasthan polyesters ltd Management discussions


RAJASTHAN POLYESTERS LIMITED ANNUAL REPORT 2004-2005 MANAGEMENT DISCUSSION AND ANALYSIS OVERVIEW The year under review witnessed stagnant & sluggish demand. There was erosion in the margins. The Company faced liquidity crunch and the Plant had to be stopped frequently. The gross turnover decreased to Rs.119.24 lacs compared from Rs.1976.69 lacs in the previous year, which can be attributed to cash crunch and closure of the Plant. The Company incurred operating loss of Rs.130.93 lacs before interest & depreciation and net loss for the year was Rs. 1298.78 lacs. CURRENT OUTLOOK During the current year due to cash crunch and slump in the market, the Company had to stop a major portion of Plant from time to time. However, the management hopes to restart the Plant within next 2-3 Months. OPPORTUNITY AND THREATS Market conditions are likely to improve, however competition will be a regular challenge to the Company. INTERNAL CONTROL SYSTEM AND ADEQUACY The Company has an adequate internal control system commensurate with its size and nature of its business. The Management has overall responsibility for the Companys internal control system to safeguard the assets and to ensure reliability of financial records. The Company has a budgetary control system and periodically the actual performance is reviewed and decision taken accordingly. Internal Audit Programme covers all areas of activities and periodical reports are submitted to the Management. Audit Committee reviews all financial statements and ensures adequacy of internal control system.