Sh. Jagdamba Pol Management Discussions


The Board of Directors is pleased to share with you the Management Discussion and Analysis Report for the Financial Year ended on March 31,2023.

COMPANY SYNOPSIS

Shri Jagdamba Polymers Limited is a company primarily engaged in the manufacturing and export of techincal textile. Our main focus is on the export market, although we also cater to domestic sales.

With a strong emphasis on quality and innovation, we strive to deliver superior textile products that meet the diverse needs of our customers. Our extensive range of fabric offerings allows us to cater to various industries and applications.

In addition to manufacturing, we also engage in job work activities, providing customized solutions and services to our clients. This allows us to leverage our expertise and capabilities to meet specific requirements and deliver value-added solutions.

At Shri Jagdamba Polymers Limited, we are committed to maintaining high standards of customer satisfaction, product quality, and operational efficiency. With a dedicated team of professionals and state-of-the-art manufacturing facilities, we ensure that our customers receive reliable and superior products.

Our focus on exports enables us to expand our market reach and establish strong relationships with international clients. We continuously explore new opportunities and markets to further grow our export business and contribute to the economic growth of our country.

Overall, Shri Jagdamba Polymers Limited is a dynamic and customer-centric company that excels in manufacturing and exporting textile fabrics impregnated, coated, covered, or laminated with plastic. Our commitment to quality, innovation, and customer satisfaction sets us apart in the industry.

ANNUAL FINANCIAL PERFORMANCE

> Shri Jagdamba Polymers Limited experienced a decrease in profit after tax in the financial year 202223 compared to the previous year.

> The companys profit after tax for the financial year 2022-23 was 3,006.26 Lakhs, indicating a decline from the previous years profit of 5,116.05 Lakhs.

GLOBAL ECONOMY OVERVIEW

The global economy is projected to experience a slowdown in growth in the fiscal year 2022-23. According to the International Monetary Fund (IMF). The baseline forecast is for growth to fall from 3.4 percent in 2022 to 2.8 percent in 2023, before settling at 3.0 percent in 2024. Supply-chain disruptions and rising geopolitical tensions have brought the risks and potential benefits and costs of geoeconomics fragmentation to the center of the policy debate. The global economy is projected to experience a slowdown in growth in the fiscal year 2022-23 due to various factors such as supply-chain disruptions, geopolitical tensions, and the COVID-19 pandemic.

INDIAN ECONOMY OVERVIEW

The Indian economy grew by 7.2% in real terms in the financial year 2022-23, according to the Economic Survey 2022-23. This is lower than the 8.7% growth in the previous financial year, but still a healthy pace of growth. However, India is currently facing the challenge of addressing inflation, which has been further compounded by the ongoing Russia-Ukraine conflict. Buoyed by its strong fundamentals, India has emerged as a significant

force in the global economy, demonstrating remarkable progress over the past decade. It has advanced from being the tenth-largest economy in the world based on exchange rates to now occupying the fifth position. Furthermore, India has also secured its position as the third-largest economy globally in terms of Purchasing Power Parity (PPP). This achievement is attributed to key reforms that have been implemented, such as liberalization, the reduction of bureaucratic hurdles and corruption, investments in infrastructure, and increased accessibility of finance for small and medium-sized enterprises.

INDIAN TECHNICAL TEXTILE OVERVIEW AND OUTLOOK

The market for technical textiles in India is growing in various industries such as automobile, agriculture, geotextiles, industrial/military, medical/healthcare, and construction due to the unique functional properties offered by technical textiles The Indian government has taken several positive steps to support the textile industry, including announcing benefits in the Union Budget for 2022-23. The industrys contribution to the Indian economy, employment generation, and export potential makes it a significant player in the global technical textiles market. India is one of the largest exporters of textiles and apparel in the world. India is a major player in the global technical textiles market.

REVIEW OF OPERATIONS:

1. Revenue from Operations: The company reported total revenue from operations of ^32,773.62 lakhs for the year ended March 31,2023, compared to ^36,905.33 lakhs in the previous year. This represents a decrease in revenue.

2. Other Income: The company generated other income of ^861.45 lakhs, compared to ^804.78 lakhs in the previous year. This indicates a slight increase in other income.

3. Expenses: The companys total expenses for the year were ^29,526.55 lakhs, compared to ^30,972.87 lakhs in the previous year. This suggests a decrease in expenses.

4. Profit Before Tax: The company reported a profit before tax of ^4,108.51 lakhs, compared to ^6,737.24 lakhs in the previous year. This indicates a decrease in profitability.

5. Tax Expenses: The company incurred total tax expenses of ^1,102.25 lakhs, compared to ^1,621.1 lakhs in the previous year.

6. Profit After Tax: The company reported a profit after tax of ^3,006.26 lakhs for the year ended March 31, 2023, compared to ^5,116.05 lakhs in the previous year. This represents a decrease in profitability.

7. Earnings per Share (EPS): The basic earnings per share (EPS) for the year was ^34.33, compared to ^58.42 in the previous year. This decrease is in line with the reduced profitability of the company.

Shri Jagdamba Polymers Limited experienced a decrease in revenue, profitability, and earnings per share in the financial year ended March 31, 2023. The companys expenses decreased slightly, but it still reported a lower profit before tax and profit after tax compared to the previous year.

The company should focus on strategies to boost revenue and control expenses to improve its financial performance in the coming years.

Exports Performance:

? In financial year 2021-22, the company had total sales of ^32,288.61 lakhs, out of which ^31,601.77 lakhs were attributed to export sales.

? In financial year 2022-23, the companys total sales reduced to ^29,141.24 lakhs, with export sales amounting to ^27,841.55 lakhs.

These figures indicate that the companys export sales decreased from ^31,601.77 lakhs in 2022 to ^27,841.55 lakhs in 2023.

SEGMENT-WISE PERFORMANCE:

The Companys main business activity is manufacturing of Technical Textiles.

OUTLOOK:

The Company continues to explore the possibilities of expansion and will make the necessary investments when attractive opportunities arise.

RAW MATERIAL PRICES

The prices of basic major raw materials used in our manufacturing process viz. PP/HDPE of various grades doesnt affect much, as we are working in open market scenario.

OPPORTUNITIES AND THREATS:

Opportunities:

Investments in Technical Textile Industry: The Technical Textile Industry in India is expected to witness investments in the financial year 2022-23. These investments can create opportunities for growth and innovation in the sector.

Government Support: The Indian government has been taking initiatives to support the growth of the Technical Textile Industry.

R&D Projects: The government has approved research and development (R&D) projects in the textile sector. These projects can lead to technological advancements and new product development in the Technical Textile Industry.

Market Growth: This Sector indicates the growth potential and opportunities available in the sector.

Export Potential: Indian Export potential can open up opportunities for Technical Textile manufacturers to tap into international markets.

Employment Generation: This Sector indicates the potential for job creation in the Technical Textile sector as well.

THREATS

Competition: The Technical Textiles industry in India is highly competitive, with many players vying for market share. Increased competition could pose a threat to companies operating in this segment, as it may lead to price pressures and reduced profit margins.

Raw Material Price Volatility: Fluctuations in the prices of raw materials, can impact the cost of production for companies in the Technical Textiles segment. If the prices of raw materials increase significantly, it could negatively affect profitability.

Changing Consumer Preferences: Consumer preferences and trends in the textile industry are constantly evolving. If there is a shift in consumer demand towards alternative materials or products, companies in the Technical Textiles segment may face challenges in adapting to these changes and meeting customer expectations.

Regulatory Changes: Regulatory changes, such as import/export policies, taxation, or environmental regulations, can have a significant impact on the Technical Textiles segment. Companies need to stay

updated with the latest regulations and ensure compliance, as non-compliance could result in penalties or restrictions on business operations.

Technological Advancements: Technological advancements and innovations can disrupt traditional practices and processes in the Technical Textiles industry. Companies that fail to embrace new technologies or adapt to changing market dynamics may find themselves at a disadvantage compared to their competitors.

Global Economic Factors: The Technical Textiles segment in India is not immune to global economic factors. Events such as economic recessions, currency fluctuations, or geopolitical tensions can impact the demand for Technical Textiles products and affect the overall business environment.

RISKS AND CONCERNS:

Polymers production relies on the availability and cost of raw materials such as ethylene, propylene, and other petrochemical feedstocks. Any disruptions in the supply chain or fluctuations in raw material prices can impact the production costs and profitability of polymer manufacturers.

Increasing emphasis on environmental sustainability and circular economy practices can pose challenges for polymer manufacturers. Meeting regulatory requirements related to waste management, recycling, and reducing the environmental impact of polymer production processes can require significant investments and operational changes.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS:

Human Resources are one of the most important ingredients for growth. Training of employees to maintain high level of motivation is an ongoing process. Industrial relations at all the units remained cordial during the year. The Company recognizes human resources as its biggest strength which has resulted in getting acknowledgement that the Company is the right destination where with the growth of the organization, value addition of individual employees is assured. The total number of employees as on March 31, 2023 is 1409 (Previous Year employees was 1538).

INTERNAL CONTROL:

The Company has an adequate internal control system for safeguarding the assets and financial transactions of the Company. The strong internal control systems have been designed in such a way that, not only it prevents fraud and misuse of the Companys resources but also protect shareholders interest.

ACCOUNTING POLICIES:

The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year. The financial statements have been prepared under the historical cost convention on an accrual basis. The management accepts responsibility for the integrity and objectivity of the financial statements, as well as for the various estimates and judgment used therein.

DISCLOSURE OF ACCOUNTING TREATMENT IN PREPARATION OF FINANCIAL STATEMENT:

The Company has followed all relevant Accounting Standards laid down by the Institute of Chartered Accountants of India (ICAI) while preparing Financial Statements.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS

Sr.

No.

Ratio Numerator Denominator As At

31/03/2023

As At

31/03/2022

%

Variance

Reason

for

Variance

1

Current

Ratio

Current Assets Current

Liabilities

8.16 4.70 73.38% Refer Note -1

2

Debt-Equity

Ratio

Total Debt Total Equity 0.09 0.21 -57.52% Refer Note -2

3

Debt Service

Coverage

Ratio

Earnings before Interest, Tax and

Exceptional

Items

Current maturity of long term debt + Interest Expense 5.09 7.57 -32.80% Refer Note -3

4

Return on

Equity

(ROE)(%)

Profit after tax Average Net worth 15.15% 32.34% -53.15% Refer Note -4

5

Inventory

Turnover

Ratio

COGS Average

Inventory

5.16 4.68 10.28%

6

Trade

receivables

turnover

ratio

Value of Sales & Services Average Trade Receivable 4.43 4.75 -6.80%

7

Trade

payables

turnover

ratio

Purchases Average Trade Payable 28.64 28.66 -0.08%

8

Net capital

turnover

ratio

Turnover Average working capital 2.43 3.66 -33.66% Refer Note -5

9

Net profit ratio (%) Profit after tax Value of Sales & Services 9.17% 13.86% -33.83%

Refer Note -6

10

Return on capital employed (ROCE)(%) EBIT Capital

Employed

19.47% 34.28% -43.21%

11

Return on investments (%) Net Profit Equity + Reserves & Surplus 14.10% 27.86% -49.40%

Reasons for Variations

1. Current Ratio: It is primarily increased as the company has repaid its debt.

2. Debt-Equity Ratio: It is primarily decreased as the company has repaid its debt.

3. Debt Service Coverage Ratio: It is primarily decreased due to decrease in EBIT of the company.

4. Return on Equity (ROE)(%) : It is primarily decreased due to increase in Retained Earnings.

5. Net Capital Turnover Ratio: It is primarily decreased due to increase in average working capital.

6. It is primarily decreased due to increase in Capital Employed and decrease in earning as compare to previous year.

CAUTIONARY STATEMENT:

Certain statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ from those expressed or implied therein.

Registered Office:

For and on behalf of Board of Directors

Harmony, 4th Floor,15/A, Shree Vidhyanagar

Shri Jagdamba Polymers Limited

Co.Op. Hsg Soc. Ltd. Opp. Nabard,Nr. Usmanpura

Garden, Ahmedabad- 380014, Gujarat.

Ramakant Bhojnagarwala

Date: August 14, 2023

Chairman Cum Managing Director

Place: Ahmedabad

DIN:00012733