Shree Ajit Pulp and Paper Ltd Management Discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENTS:

The Company Manufactures Multilayer Testliner and Testliner Paper from 80 to 350 GSM and 18 to 35 BF. This product is mainly used for making Corrugated Boxes, Duplex Cartons, corrugated small e-flute etc. as packaging material.

The Company is having two wind mills of total capacity of 2.75 MW in Gujarat State, set up for captive consumption. These are in operation. The Company is having wheeling arrangement with GETCO and DGVCL whereby the set off is given to the Company for generation of electricity from the wind mills.

2. AN OVERVIEW:

The overall performance of the Company during the year under report has been satisfactory in line with general economic conditions in the country. The revenue from operations of the Company has decreased by 20.80% to Rs. 29,450.83 lakh during the year from Rs. 37,187.69 lakh in the previous year. The Profit before Tax has decreased to Rs. 1,092.19 lakh from Rs. 1,585.35 lakh and the Profit after Tax decreased to Rs. 788.61 lakh as compared to Rs. 1,128.79 lakh of the previous year. The profit before tax has decreased by 31.11% and profit after tax has decreased by 30.14%.

3. OVERALL PRODUCTION AND SALES PERFORMANCE:

4. CURRENT AND FUTURE OUTLOOK:

The company has been constantly upgrading manufacturing facilities for improving production, quality of products and yields.

Companys efforts towards increasing production capacity and remaining competitive in the market has come to fruition. The acquisition of Unit-II from NR Agrawal Industries, located at Plot No. 1 and 1/B, 1s Phase, GIDC, Vapi, Gujarat, is now complete and the Unit II has commenced the production.

5. PLANS FOR UP-GRADATION AND IMRPOVEMENT:

The company has been constantly upgrading manufacturing facilities for improving production, quality of products and yields.

The wholly owned subsidiary of the Company, namely Shree Samrudhi Industrial Papers Private Limited has not yet commenced business.

6. OPPORTUNITIES AND THREATS / RISKS AND CONCERNS:

The future of the Paper industry in general and Multilayer Testliner and Testliner Paper in particular is linked with the future of world economy. When the economy in general is on the down turn, the demand for Companys products is also likely to fall. On the other hand, when the economy in general is on the up-turn, the demand for the Companys products is likely to increase. The Company is having advantage over most of the other manufacturers as it is professionally managed and its operations are efficient, cost effective and highly competitive.

a) REVENUE:

During the year under review, the revenue from operations has decreased by 20.80% to Rs. 29,450.83 lakh from Rs. 37,187.69 lakh in the previous year. The sales in terms of volume increased by 14.93% compared to previous year. The profit before tax has decreased by 31.11%.

b) DEBT:

As at 31st March, 2024, the Companys total debt including Term Loans and Working Capital Facilities was Rs. 22,627.28 lakh as compared to Rs. 16,935.14 lakh in the previous year. The finance cost has increased to Rs. 739.65 lakh during the year under report from Rs. 649.65 lakh during the previous year. The repayment of Term Loan is being done regularly.

c) PROFIT FOR THE YEAR:

The profit for the year under review was Rs. 788.61 lakh as compared to Rs. 1,128.79 lakh in the previous year. The EPS has decreased to Rs. 14.18 against Rs. 21.07 in the previous year.

8. INTERNAL CONTROL SYSTEMS Rs.

The Company has adequate Internal Control System in place. The Internal Audit is conducted by a reputed Firm of Chartered Accountants specializing in Internal Audits, whose report is placed before the Audit Committee periodically. The Audit Committee closely reviews the progress made on the observations which helps strengthen overall financial control. The details of the Audit Committee Meetings are given under the Corporate Governance Section of this report.

9. INCREASE IN SHAREHOLDER VALUE:

Your Company makes all efforts to adopt the best systems and methods of doing the business, reduce overheads, improve productivity and establish better customer relations with improved quality and effective distribution network. The Company periodically, evaluates the overall business and tries to shift towards value added products. The Company is making sincere efforts to devise better strategy for growth and improving profitability, thereby enhancing shareholder value in the changing market situation.

10. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NO. OF PEOPLE EMPLOYED:

The Company has a team of 65 competent and highly motivated technical and management staff. It has 230 clerical, computer operating and other staff and 88 workmen handling factory operations. There is continuous communication between all levels of employees. The Employer- Employee relations are harmonious and cordial.

11. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS AND RETURN ON NETWORTH:

As per the amendment made under Schedule V to the Listing Regulations read with Regulation 34(3) of the Listing Regulations, details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in Key Financial Ratios and any changes in Return on Net Worth of the Company including explanations therefor are given below: