Refnol Resins & Chemicals Ltd Merged Management Discussions

OVERVIEW OF GLOBAL BUSINESS ENVIRONMENT

Economic activity in India and elsewhere picked up as the pandemic came under control. There was considerable recovery in your Companys turnover, reaching pre-pandemic levels.

Your Company manufactures Polyester Resins, Laundry & Cleaning Chemicals, Textile Sizing Chemicals, Auxiliaries and Garment Wash Chemicals at its facility at Plot No 23, Phase III, Naroda, GIDC, Ahmedabad-30. Sales are promoted in both Domestics and Export markets.

All the businesses experienced growth during the year, despite logistics constraints, especially in availability of containers for exports.

Your Company manufactures resins and polymers for the textile, plastic and coatings industry-all of which are poised for substantial long-term growth in tandem with the the Indian economy.

The main threat during the financial year under review was the continues and relentless increase in input costs, including raw materials, fuel, and transportation, resulting in a severe erosion of margins and profitability. This trend continued through the year.

While the global outlook continues to be cautious with a number of major economies in or on the verge of recession, the outlook for the Indian economy is positive and all indicators point to robust growth in the medium term.

Costs are currently stable and the situation is conducive for a concerted efforts to boost the growth & profitability of the Company.

To ensure sustainable and consistent growth, Company has developed a sound risk management framework that properly assesses and continuously monitors the risks assumed. The Risk Management and Control Systems are considered to be in balance with Refnols risk profile and appetite, although such systems can never provide absolute assurance. Refnols Risk Management and Control Systems are subject to continuous review and adaptations to remain in balance with its growing business size and changes in its risk profile. Necessary insurance policies are in place to take care of all the important machineries to minimize losses if any during operation.

The Company has an Internal Control System that is commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function are defined in the Internal Audit Charter. To maintain objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

Your company generated an income of Rs. 3804.96 lakhs from its operations in FY 2022-23, compared to Rs. 3481.02 lakhs generated last year. The profit for the year amounted to Rs. 28.30 lakhs, a significant improvement compared to the loss of Rs. (17.06) lakhs incurred last year.

Your Company has continued to publish consolidated accounts of its Subsidiaries in line with last year.

We implemented a systematic performance appraisal system and laid down competitive incentive plans. The number of persons employed by your Company was Seventy One.

Your Company values both experience and fresh talent, taking pride in the commitment, competence and dedication shown by its employees in all areas of business. The company is also conscious of the importance of environmentally clean and safe operations. Periodic technical skills training is provided to employees to enhance their expertise.

Statements in the Management Discussion and Analysis describing the Companys objectives and expectations may be considered "forward looking statement" within the meaning of applicable securities laws and regulations. These statements are based on certain assumptions and reasonable expectation of future events. However, Actual results could differ materially from those expressed or implied. Important factors that could affect the Companys operations include, among others, economic conditions affecting demand/ supply, price conditions in the domestic and overseas markets in which the Company operates, changes in Government regulations and tax structure, economic developments within India and the countries with which the Company has business contacts, and other factors such as litigation and industrial relations.

Short term set-backs and hiccups due to major external upheavals do not detract from the long-term potential, growth, and profitability of the company.