Rishiroop Ltd Management Discussions

INDUSTRY STRUCTURE

The rubber industry is one of the key sectors of the Indian economy. India is the fourth largest producer of natural rubber and the third largest consumer of the polymer. As far as consumption of natural and synthetic rubber together is concerned, the country occupies the fourth position. Growth in natural rubber consumption is at 3-4 % year over year and that for synthetic rubber at 15-20% since the past five years. This reflects the potential that exists for the growth of the industry in India which could be met by imports coupled with local manufacturing.

Your company is in the business of manufacturing of polymer blends consumed mainly by the medium and small scale sector which accounts for over 50% of production of rubber goods in non-tyre industrial products. The polymer blends are used in the manufacture of petrol hoses, LPG tubing, O-rings, seals & gaskets, printing & textile rollers, cable sheathing, automotive components, etc. Polymer compounding is the science of developing rubber mixtures with suitable raw materials and their doses to achieve optimal processing and performance in the end rubber product. It is a critical intermediate product for the medium and small unit making various rubber products.

Besides Polymer blends, the Company also sells other complimentary products sourced from abroad. Due to fragmented structure of the user industry, the market is highly price competitive.

ECONOMY AND MARKETS India Economy Trends:

Indian economy estimated to grow at over 7.2 % in 2023-2024.

During the year under review, there was good demand for the Company products from domestic industrial segments using rubber, however, due to falling prices the margins were under pressure.

FINANCE AND ACCOUNTS

The following financial review is intended to convey the managements perspective on the financial performance of the company at the end of the financial year 2023-24.

The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013 and generally accepted Accounting Principles in India.

FINANCIAL PERFORMANCE

Profit/(Loss) before taxation (PBT) for the current financial year 2023-24 is Rs. 2797.83 lacs as compared to Rs. 1087.73 lacs for the previous year. During the year, other income in the year under review was Rs. 2172.58 lacs as compared to Rs. 143.98 lacs in previous year, primarily sharp increase in value of the investment portfolio owing to bullishness in the equity market. Company Fixed Assets viz. Property, Plant and Equipment were valued at Rs. 223.96 lacs at the end of the financial year. Total inventories was Rs. 917.43 lacs as compared to Rs. 1041.45 lacs in previous year.

OPPORTUNITIES AND THREATS

The Company continues to customize and promote its new grades of polymer blends to meet the requirements of domestic and international markets.

Due to stability in supply, there was fall in prices which has put the margins under pressure. OUTLOOK

Going forward the situation is expected to remain stable and the Company is optimistic of growing the domestic business in the coming year.

RISKS AND CONCERNS

Weakening global economic conditions and persistent inflation remain a potential area of concern. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has an adequate system of internal control commensurate with the size and the nature of its business, which ensures that transactions are recorded, authorized and reported correctly apart from safeguarding its assets against loss from wastage, unauthorized use, and removal.

The internal control system is supplemented by documented policies, guidelines, and procedures. The Companys internal auditors continuously monitors the effectiveness of the internal controls with a view to provide to the Audit Committee and the Board of Directors an independent, objective and reasonable assurance of the adequacy of the organizations internal controls and risk management procedures. The Internal Auditor submits detailed reports on quarterly basis to the Audit Committee and management. The Audit Committee reviews these reports with the executive management with a view to provide oversight of the internal control system.

The Company reviews its policies, guidelines, and procedures of internal control on an ongoing basis in view of the ever changing business environment.

SEGMENT

The primary segment that your Company operates in is Polymers and Polymer Compounds, and their related products.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES AND INDUSTRIAL RELATION FRONT

The Company is maintaining good relations with its employees and currently employs about 32 employees in all categories. The Company values and understands the need for continuous growth and development of its people in order to have greater productivity and provide job satisfaction and also equip them to meet growing organizational challenges. Your Company has genuine concern and top priority for safety and welfare of its employees.

INFORMATION TECHNOLOGY

Information Technology has become inevitable and integral to strategic planning and efficient management of operations. Your Company continues to strategically invest in Information Technology looking at it as vital to business growth.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

Sr. No. Key Financial Ratios	2023- 2024	2022- 2023	Variance	Variance %	Detailed Comments
i Debtors Turnover	6.55	6.33	0.22	3.50	The Increase in ratio is due to higher reduction in Average Trade Receivables as compared to sales
ii Inventory Turnover	6.74	6.11	0.63	10.33	The Increase in ratio is due to faster movement in Inventory during the current year resulting in reduction in Inventory on hand thereby improving the inventory turnover ratio
iii Interest Coverage Ratio	-	-	-	-	-
iv Current Ratio	4.29	4.75	(0.46)	(9.69)	The Decrease in ratio is due to Decrease in Current Investments
v Debt Equity Ratio	-	-	-	-	-
vi Operating Profit Margin (%)	8.15	10.64	(2.49)	(23.40)	The Decrease in ratio is mainly due to increase in material costs during the year
vii Net Profit Margin (%)	9.56	8.46	1.10	12.96	The Increase in ratio is mainly due to capital gain income and decrease in expenses during the year
viii Return on Networth (%)	19.62	7.93	11.69	147.41	The Increase in ratio is mainly due to substantial gain on fair valuation of investments

CORPORATE GOVERNANCE

Your Company is in compliance with the governance requirements provided under the Companies Act, 2013, the aforesaid Companies (Amendment) Act, SEBI (Listing Agreement and Disclosure Requirement) Regulation, 2015, the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government.

The Company has in place all the statutory committees as required by the law. Details of Committees are given in the Corporate Governance Report.

The policies framed and adopted by the Company in compliance with statutory requirements are available on the website of the Company http://www.rishiroop.in/investors/corporate-governance/ policies/

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 also provided for formulating the Code of Conduct for members of the Board and Senior Management, Codes of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and Code of Conduct to regulate, monitor and report trading by its employees and other connected persons. Your Company has formulated the above codes and abided with the regulations.

STATUTORY COMPLIANCE

A declaration is made at the Board Meetings regarding Compliance with provisions of various statutes after obtaining confirmation from all the units of the Company. The Company Secretary ensures compliance with the SEBI regulations and provisions of the Listing Agreement.

Place: Mumbai	For and on behalf of the Board of Directors Arvind Mahendra Kapoor
Date: 21.05.2024	Chairman
Registered Office: W-75(A) & W-76(A) MIDC Industrial Area Satpur, Nasik - 422007 CIN - L25200MH1984PLC034093	DIN: 00002704