Roni Households Ltd Management Discussions

The discussion hereunder covers Companys performance and its business outlook for the future. This outlook is based on assessment of the current business environment and Government policies. The change in future economic and other developments are likely to cause variation in this outlook.

The Managements views on the Companys Performance and outlook are discussed below:

ECONOMIC REVIEW:

Global Economy:

Global economic growth is anticipated to reach 3.1 percent in 2024 and 3.2 percent in 2025. The forecast for 2024 exceeds the October 2023 World Economic Outlook (WEO) by 0.2 percentage points due to stronger-than- anticipated resilience observed in the United States and several prominent emerging market and developing economies, alongside fiscal measures implemented in China. Nevertheless, the projected growth rates for 2024- 2025 falls short of the 3.8 percent historical average recorded during 2000-2019. This divergence is attributed to heightened central bank policy rates aimed at combating inflation, reduction in fiscal support amidst elevated debt levels that impose constraints on economic activity, and sluggish underlying productivity gains. Notably, inflation rates are declining more swiftly than earlier projections across most regions, driven by the resolution of supply-side disruptions and the implementation of restrictive monetary policies. Global headline inflation is expected to decrease to 5.8 percent in 2024 and further to 4.4 percent in 2025, with downward revisions made to the 2025 forecast.

Indian Economy Outlook:

India has maintained a strong economic performance despite global challenges and geopolitical concerns. This resilience can be attributed to robust domestic demand, a pickup in rural demand, strong investment levels, and sustained momentum in manufacturing. Despite global challenges, India stands out for its robust economic growth, demonstrating broad-based expansion across various sectors and reaffirming its pivotal role in supporting global economic growth.

The combined efforts of the government and the Reserve Bank of India (RBI) to tackle inflation through strategic policy rate adjustments, bolstering food reserves, and facilitating easier imports have successfully managed inflationary pressures. As a result, retail inflation in the fiscal year 2023-24 saw a notable decrease, reaching its lowest point since the onset of the Covid-19 pandemic. Core inflation specifically declined to 3.3% by March 2024. Moreover, the forecast of an above-normal monsoon in 2024 augurs well for agricultural productivity, which is expected to further alleviate concerns regarding inflation.

The backdrop of slowing global trade poses challenges for economies globally. However, India is poised to reduce its trade deficit in the upcoming years, supported by the expanded coverage of the Production Linked Incentive (PLI) scheme across multiple sectors. Strong export performance and robust remittance inflows are anticipated to contribute significantly. International agencies and the Reserve Bank of India (RBI) forecast that the Current Account Deficit (CAD) as a percentage of GDP will likely have moderated to below 1% in the fiscal year 2023-24.

India remains the fastest-growing major economy, with international organizations and the Reserve Bank of India (RBI) providing positive assessments of its growth outlook for the current financial year.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

Indian plastic industry market is one of the leading sectors in the countrys economy. The history of the plastic industry in India dates to 1957 with the production of polystyrene. Since then, the industry has made substantial progress and has grown rapidly. The industry is present across the country and has more than 2,000 exporters. It employs more than 4 million people in the country and constitutes 30,000 processing units; among these, 85- 90% belongs to small and medium enterprises. India manufactures various products such as plastics and linoleum, houseware products, cordage, fishnets, floorcoverings, medical items, packaging items, plastic films, pipes, raw material, etc.

Between 1990 and 2021, plastic consumption in India increased 23-fold to roughly 21 million tons. This rapid increase saw per capita plastic consumption rise from just one kilogram per inhabitant to 15 kilograms. India accounts for approximately six percent of global plastics use, making it the third-largest consumer of this material behind China and the United States. Factors such as economic growth and population growth are expected to drive plastics use in the coming decades, with projections showing plastics consumption in India could raise to more than 160 million metric tons by 2060. This would see the countrys share of global plastic consumption more than double compared to current levels.

The country majorly exports plastic raw materials, films, sheets, woven sacks, fabrics, and tarpaulin. The Government of India intends to take the plastic industry from a current level of Rs. 3 Lakh Crore (US$ 37.8 billion) of economic activity to Rs. 10 Lakh Crore (US$ 126 billion) in four-five years.

GOVERNMENT INITIATIVES:

The Union Ministry of Commerce and Industry of India targets to increase the plastic exports of the country to US$ 25 billion by 2027 there are multiple plastic parks are being set up in the country in a phased manner that will help improve the plastic manufacturing outputs of the country. Under the plastic park schemes, funds of up to 50% of the project costs or a ceiling cost of Rs. 40 Crore (US$ 5 million) per project.

Government initiatives like "Digital India", "Make in India", and "Skill India" will also boost Indias Plastic industry. For instance, under the "Digital India" program, the government aims to reduce the import dependence of products from other countries, which will lift the local plastic part manufacturers.

The government also launched a program for building Centres of Excellence (CoEs) to develop the existing petrochemical technology and promote the research environment pertaining to the sector in the country. This will aid in promoting and developing new applications of polymers and plastics in the country. Additionally, about 23 Central Institute of Plastics Engineering & Technology (CIPET) have been approved to accelerate financial and technological collaboration for promoting skills in chemicals and petrochemicals sector.

OUR BUSINESS:

Roni Households Limited operates in the trading sector, specializing in plastic granules and various household plastic products like tubs, buckets, and ghamelas. However, their vision extends beyond trading. The company is actively engaged into manufacturing plastic household products. Looking ahead, Roni Households Limited aims to leverage its strong balance sheet and established network within Jalgaons trading community to solidify its presence in the plastic products market. The company is committed to building a robust, quality- and innovation-driven vertical that integrates both trading and manufacturing. To achieve this ambitious plan, they are actively assembling a qualified team to manage the anticipated increase in operational needs.

1. Trading Business Process

The trading business vertical of the company is a B2B model and operates primarily on an agency basis wherein the goods are procured from suppliers on cash or credit basis and supplied to customers on credit basis. The procurement of goods is carried out on an "order" basis as well as "demand estimation basis".

2. Proposed Manufacturing Process

The basic raw material is PVC Granules. This raw material is fed into the Feeding hopper of Injection Moulding Machine. Wherein, the raw material is heated by the heater and is converted into hard solvent and the hard solvent then injected into moulds. Water is circulated and re-circulated on moulds for cooling purpose. The injection moulding items are then packed and are ready for sale.

OPPORTUNITIES:

Indias plastic industry is on a promising trajectory, with projections of a 6.6% growth rate and an ambitious target of $25 billion in exports by 2027. The Indian plastic industry is on a significant upswing, with the government aiming for an ambitious near four-fold increase in its size in the coming years. This presents a wealth of opportunities for the Company across the plastic product spectrum, particularly in the strategically important state of Maharashtra, a well-established industrial hub.

For plastic granules, the demand is surging due to robust growth in key sectors like packaging, construction, and automobiles. The Company can tap into this by strategically supplying high-quality granules to manufacturers of these vital products. Furthermore, the growing disposable incomes of the Indian population are driving a demand for well-designed and functional household items made from responsible plastics. The Company can capitalize on this trend by focusing on innovative and sustainable household product design, ensuring their products cater to the evolving needs of Indian consumers. By strategically addressing these opportunities and remaining committed to quality and sustainability, The Company is well-positioned to flourish in the thriving Indian plastic industry, particularly within the dynamic state of Maharashtra.

THREATS, RISKS AND CONCERNS:

Sustainable production: Though the huge demand for plastic products around us might seem to be a boon, it is quite a big responsibility. It is equally challenging to meet such growing demand of the growing population. During the pandemic too, the demand for plastic utility products grew to a great extent. To manage the mushrooming demand one needs to set up a big manufacturing unit and huge manpower. Maintaining and fulfilling the government norms for the large manpower at work is also very challenging. The demand always creates pressure on the manufacturer to produce more and more quickly. Also, the lifespan of a plastic product has decreased to months from years which have created the need to produce more plastic products in less time.

Meeting the quality: It becomes quite impossible to reduce human errors to zero percentage. The efficacy of the products produced is hampered in a big way. These lots are segregated from the fresh lots and increase wastage. The products that have quality issues thus increase the cost of production. It needs to put in constant efforts and checks to ensure the quality at each stage of production.

The environmental Pollution: The unaltered important place of plastic in our daily life could not be ignored at all. Such huge usage of plastic products is being causing Environmental pollution. It is leading to huge dumps of non-biodegradable wastes of plastic bottles, polythene, packing material, etc. From production to use to disposal of plastic, each stage adds to the greenhouse effect affecting nature. All of these together put a great challenge on the manufacturers to save the environment and continue plastic production as per the market requirement. It is quite challenging to fulfill the environmental regulations with tons of plastic production every day

Substitute Products: Plastic products have become ubiquitous in our daily lives, but their environmental impact has led to increased interest in finding substitutes. Substitute Product is Bamboo Products, Stainless Steel Containers, Beeswax Wraps, Paper Bags, Biodegradable Plastics, Cotton Bags, Plant-based Packaging.

Innovation and competition: Plastic products are in so much of demand and probably a very common business around the globe. At the same time the more the competitors the more is the responsibility to stand out of the crowd. It adds immense pressure to innovate uniqueness in your product. To capture the market your product must have special unique features that attract and hold your customer base. Not only once, but the manufacturing units also need to innovate something or the other at some fixed interval of time to remain the bestseller in the plastic industry.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has adequate internal control procedures commensurate with its size and nature of business in India. The Company has clearly laid down policies, guidelines and procedures that form a part of the internal control systems. The adequacy of Internal Control Systems, which encompasses the Companys business processes and financial reporting systems, is examined by the management as well as by its internal auditors at regular intervals.

The internal auditors carry out audits at regular intervals in order to identify weaknesses and suggest improvements for better functioning. The observations and recommendations of the Internal Auditors are discussed by the Audit Committee to ensure effective corrective action.

OUTLOOK:

Roni Households Limited operates in the trading sector, specializing in plastic granules and various household plastic products like tubs, buckets, and ghamelas. Our product portfolio includes polyethylene terephthalate (PET), a popular plastic variant used extensively in rigid packaging applications. Our vision is to leverage Indias competitive advantage in the plastic sector to boost exports. Our mission is to focus on sustainable practices, innovation, aligning with the governments initiatives to promote a circular economy. We are committed to developing eco-friendly products and improving waste management infrastructure. By adopting sustainable practices and innovative technologies, we aim to achieve responsible growth and global competitiveness.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

The key strategy will be focused around:

1. Financial strength & liquidity

2. Professional Management

3. Timely completion of Orders

4. Customer care

5. Brand Equity

Financial Performance and Review of Operations:

(Rs. In Lakhs)

	Standalone-Year Ended		Consolidated-Year Ended
	31/03/2024	31/03/2023	31/03/2024
31/03/2023
Revenue From Operations	768.28	548.93	1685.81	1432.46
Other Income	87.25	11.36	87.25	11.36
Total Income	855.54	560.29	1773.05	1,443.82
Less: Total Expenses before Depreciation, Finance Cost and Tax	697.82	453.45	1614.09	1322.97
Profit before Depreciation, Finance Cost and Tax	157.72	106.85	158.96	120.85
Less: Depreciation	51.95	63.56	51.95	63.57
Less: Finance Cost	18.85	32.33	19.01	32.33
Profit Before Tax	86.92	10.95	88.00	24.95
Less: Current Tax	10.21	1.71	10.49	3.90
Less: Deferred tax Liability (Asset)	18.50	2.41	18.50	7.35
Profit after Tax	58.21	6.83	59.01	13.70

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFORE:

Ratios	Figures As At 31.03.2024	Figures As At 31.03.2023	% of Change	Reason
Debt Equity Ratio	0.27	0.19	41.77	Due to Increase in Borrowings
Debt Service Coverage Ratio	8.37	3.30	153.23	As there is Change in Profit more than Change in Interest
Return on Equity Ratio	0.08	0.01	483.34	Due to Company has made Higher Profit.
Inventory Turnover Ratio	1.17	0.77	51.91	Due to Increase in Purchases.
Trade Receivables turnover ratio	1.30	0.64	102.53	As there is Lower Average Trade Receivables.
Trade payables turnover ratio	3.22	0.57	461.10	As there is Lower Average Trade Payables.
Net capital turnover ratio	0.54	0.06	(19.58)	-
Net profit ratio	0.08	0.01	508.61	Higher Profit Compare to Last Year.
Current ratio	5.47	3.76	45.36	Due to Increase in Trade Receivables.
Return on Net Worth	0.04	0.01	(598.34)	Higher Profit Compare to Last Year.
Operating Profit Margin (%)	0.18	0.19	3.33	-
Net Profit Margin (%)	0.07	0.01	(457.85)	Higher Profit Compare to Last Year
Return on Capital Employed (%)	0.07	0.03	(100.28)	Higher EBIT Compare to Last Year.

DISCLOSURE OF ACCOUNTING TREATMENT

The financial statements of the Company have been prepared in accordance with Accounting Standard ("AS") notified under the Companies (Accounting Standards) Rules, 2021 read with section 133 of the Companies Act, 2013.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS:

The Companys relations with the employees continued to be cordial and harmonious with its employees. It considers manpower as its assets and that people had been driving force for growth and expansion of the Company. The Company acknowledge that its principal assets is it employees. The Company has continued its efforts in building a diverse and inclusive workforce.

The Company employees including factory workmen are employed daily wages basis. Hence, as on March 31, 2024 there was no employees on roll in the Company. The Company will continue to create opportunity and ensure recruitment of diverse candidates without compromising on meritocracy.

CAUTIONARY NOTE:

Statements in this Report, describing the Companys objectives, projections, estimates and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events. These statements are subject to

certain risks and uncertainties. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results may be different from those expressed or implied since the Companys operations are affected by many external and internal factors, which are beyond the control of the management. Hence the Company assumes no responsibility in respect of forward-looking statements that may be amended or modified in future on the basis of subsequent developments, information or events.

Registered office: Plot No. F - 55, Addl. MIDC Area, Ajanta Road, Jalgaon - 425003, Maharashtra.	For and on behalf of Board of Directors Roni Households Limited CIN:L25207MH2017PLC300575
Place: Jalgaon Date: July 19, 2024	Sd/- Nidhi Harish Sirwani Whole-Time Director DIN:07941219	Sd/- Harish Manohar Sirwani Chairman and Managing Director DIN: 07844075