The following discussion is intended to convey managements
perspective on our financial condition and results of operations for the financial year
ended March 31, 2022, and stub period thereon. One should read the following discussion
and analysis of our financial condition and results of operations in conjunction with our
section titled ‘Financial Statements and the chapter titled
‘Financial Information on 126 of the Draft Red Hearing Prospectus. This
discussion contains forward-looking statements and reflects our current views with respect
to future events and our financial performance and involves numerous risks and
uncertainties, including, but not limited to, those described in the section entitled
‘Risk Factors on page 25 of this Draft Red Hearing Prospectus. Actual
results could differ materially from those contained in any forward- looking statements
and for further details regarding forward-looking statements, kindly refer the chapter
titled ‘Forward- Looking Statements on page 18 of this Draft Red Hearing
Prospectus. Unless otherwise stated, the financial information of our Company used in this
section has been derived from the Restated Financial Information. Our financial year ends
on March 31 of each year. Accordingly, unless otherwise stated, all references to a
particular financial year are to the 12- month period ended March 31 of that year.
In this section, unless the context otherwise requires, any reference
to ‘we, ‘us or ‘our refers to Citichem India Limited, our
Company. Unless otherwise indicated, financial information included herein are based on
our Restated Financial Statements for Financial Year ended on 31st March 2022
and stub period thereon, included in this Draft Red Hearing Prospectus beginning on page
126 of this Draft Red Hearing Prospectus.
BUSINESS OVERVIEW
Our Company was originally incorporated as ‘Citichem Alkalies
(Bombay) Private Limited on March 18, 1992, under the Companies Act, 1956 vide
certificate of incorporation issued by the Registrar of Companies, Mumbai, by our promoter
Mr. Arif Merchant and his family members. Thereafter, Our Company was converted into a
public company pursuant to a special resolution passed by our shareholders at the EGM held
on December 12, 2016, and consequently the word private was deleted and the name was
changed to ‘Citichem Alkalies (Bombay) Limited vide fresh certificate of
incorporation dated January 15, 2017 issued by Registrar of Companies, Mumbai.
Subsequently the name of the company was changed from Citichem Alkalies (Bombay) Limited
to Citichem India Limited under the Companies Act, 1956 pursuant to a special resolution
passed by our shareholders at the EOGM held on 24/3/1999 and vide certificate of
incorporation dated December 17, 2016, issued by the Registrar of Companies, Mumbai. The
CIN of the Company is U24100MH1992PLC065975. For details of the changes in our name
and registered office, please refer to the chapter titled ‘History and Certain
Corporate Matters beginning on page 104 of this Draft Prospectus.
We are mainly engaged in the buying, procuring, and supplying, of
organic and inorganic chemicals, bulk drugs, and, food chemicals to pharmaceutical
industry. The traded speciality chemicals and intermediates have a wide application in
aluminium, steel, textiles, paper, dairy, paints, dyes & intermediates, soap making,
pharma, food and adhesive Industry. Our Company also supplies food preventives and
chemicals under its own brand name which is thereafter converted into sales in their own
books by the distribution team who ensures safe delivery of bulk supply. The said works
are primarily sourced through our leased Registered Office located at 7, Floor 1, Plot No
96, Dhram Jyoti, Kazi Sayed Street, Khand Bazar, Masjid Station, Mandvi, Mumbai - 400003,
Maharashtra, India.
With the combined experience of our Promoters for over 25 years with
their expertise in sourcing, negotiating, procuring, and supplying of organic, and
inorganic chemicals to the pharmaceutical industry, and with the existing long-standing
clientele, our Company aims to further expand, and diversify their procurement sources and
achieve growth by multiplying the supply chain of the chemicals to the said industry. Our
Promoters have a clear vision about the strong growth prospects with a view of the
expanding their market size in India year on year basis.
For detailed information on the business of our Company please refer to
‘Our Business beginning on page numbers 88 of this Draft Red
Herring Prospectus.
SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR AND STUB
PERIOD
As per mutual discussion between the Board of the Company and Lead
Manager, in the opinion of the Board of the Company there havenot arisen any circumstances
since the date of the last financial statements as disclosed in this Draft Red Herring
Prospectus and which materially and adversely affect or is likely to affect within the
next twelve months except as follows:
The authorized capital of the Company has been increased from 500 Lakhs
to 750 Lakhs
The shareholders of the Company have, pursuant to Section 62(1)(c) of
the Companies Act 2013, by a special resolution passed in the Extra Ordinary General
Meeting held on Wednesday 01st February,2023 authorized the proposed Initial
Public Offering;
Our Company has constituted an Audit Committee, Stakeholders
Relationship Committee, Nomination and Remuneration
Committee vide a resolution passed at its board meeting held on
Thursday 16th February2023, in accordance with and as per the applicable
provisions of Companies Act, 2013;
FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our business is subjected to various risks and uncertainties, including
those discussed in the section titled ‘Risk Factor beginning on
page 25 of this Draft Red Herring Prospectus. Our results of operations and financial
conditions are affected by numerous factors including the following:
Changes, if any, in the regulations / regulatory framework / economic
policies in India and / or in foreign countries, which affect national & international
finance.
Government support and spending on Chemical industry;
Companys ability to adopt the changing technology in industry;
Impact of COVID-19;
Cost and availability of raw materials;
Companys results of operations and financial performance;
Performance of Companys competitors;
Significant developments in Indias economic and fiscal policies;
Failure to adapt to the changing needs of industry and in particular
chemical industry may adversely affect ourbusiness and financial condition;
Volatility in the Indian and global capital market;
Fluctuation in other operating cost;
The occurrence of natural disasters or calamities;
DISCUSSION ON RESULT OF OPERATION
The following discussion on results of operations should be read in
conjunction with the Restated Financial Statements for the stub period ended on December
31, 2022 & financial years ended March 31, 2022, March 31, 2021, and March 31, 2020.
OVERVIEW OF REVENUE & EXPENDITURE
|
2022-23 (Upto 31/12/2022) |
|
2021-22 |
|
2020-21 |
|
2019-20 |
|
| Particulars |
Amount |
% of Total Income |
Amount |
% of Total Income |
Amount |
% of Total Income |
Amount |
% of Total Income |
| I. Revenue from operations: |
1236.85 |
100.00 |
8521.64 |
99.93 |
18016.73 |
99.94 |
12735.06 |
99.99 |
| II. Other income: |
0.00 |
0.00 |
6.37 |
0.07 |
11.06 |
0.06 |
0.64 |
0.01 |
| III. Total Income (I + II) |
1236.85 |
100.00 |
8528.00 |
100.00 |
18027.79 |
100.00 |
12735.70 |
100.00 |
| IV. Expenses: |
|
|
|
|
|
|
|
|
| Cost of material consumed |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
| Purchases of Stock-in- Trade |
1335.18 |
107.95 |
9033.24 |
105.92 |
18671.77 |
103.57 |
14898.02 |
116.98 |
| Changes in inventories of finished goods, work-in-progress
and Stock-in-Trade |
(222.18) |
(17.96) |
(668.56) |
(7.84) |
(850.99) |
(4.72) |
(2357.70) |
(18.51) |
| Employee benefit expense |
39.33 |
3.18 |
52.59 |
0.62 |
45.12 |
0.25 |
43.50 |
0.34 |
| Finance Costs |
0.63 |
0.05 |
1.61 |
0.02 |
0.33 |
0.00 |
0.68 |
0.01 |
| Depreciation and Amortization Expense |
1.16 |
0.09 |
2.21 |
0.03 |
2.33 |
0.01 |
1.32 |
0.01 |
| Other Expenses |
34.68 |
2.80 |
74.73 |
0.88 |
129.91 |
0.72 |
123.44 |
0.97 |
| Total Expenses (IV) |
1188.80 |
96.11 |
8495.82 |
99.62 |
17998.46 |
99.84 |
12709.27 |
99.79 |
| V. Profit before exceptional and extraordinary items and
tax |
48.05 |
3.89 |
32.19 |
0.38 |
29.33 |
0.16 |
26.43 |
0.21 |
| VI. Exceptional Items |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
| VII. Profit before extraordinary items and tax |
48.05 |
3.89 |
32.19 |
0.38 |
29.33 |
0.16 |
26.43 |
0.21 |
| VIII. Extraordinary |
|
|
|
|
|
|
|
|
|
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
| Items |
|
|
|
|
|
|
|
|
| IX. Profit before tax |
48.05 |
3.89 |
32.19 |
0.38 |
29.33 |
0.16 |
26.43 |
0.21 |
| X. Tax Expense: |
|
|
|
|
|
|
|
|
| (1) Current Tax |
12.49 |
1.01 |
8.52 |
0.10 |
7.63 |
0.04 |
6.87 |
0.05 |
| (2) Deferred Tax |
0.00 |
0.00 |
(0.26) |
(0.00) |
(0.26) |
(0.00) |
0.00 |
0.00 |
| (2) Tax Adjustment of Earlier Years |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|
0.00 |
|
| XI. Profit(Loss) from the period from continuing operations |
35.56 |
2.88 |
23.93 |
0.28 |
21.96 |
0.12 |
19.56 |
0.15 |
| XII. Profit/(Loss) from discontinuing operations |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
| XIII. Tax expense of discontinuing operations |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
| XIV. Profit/(Loss) from discontinuing operations after tax |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
| XV. Profit/(Loss) for the period |
35.56 |
2.88 |
23.93 |
0.28 |
21.96 |
0.12 |
19.56 |
15.36 |
| XVI. Earning Per |
|
|
|
|
|
|
|
|
| Equity Share: |
|
|
|
|
|
|
|
|
| (1) Basic |
0.79 |
|
2.14 |
|
32.29 |
|
28.77 |
|
| (2) Diluted |
0.79 |
|
2.14 |
|
32.29 |
|
28.77 |
|
Our Significant Accounting Policies
For Significant accounting policies please refer Significant Accounting
Policies, under Chapter titled ‘Financial Statementsbeginning on
page 126 of the Draft Red Herring Prospectus.
Overview of Revenue & Expenditure
Our revenue and expenses are reported in the following manner:
Revenues
Revenue of operations
Our Revenue from operations is from revenue generated from trading of
chemical goods. Our revenue from operations accounted for 100%, as percentage of our total
income during the stub period, 99.93% as a percentage of our total income for Financial
Year ended on March 31, 2022, 99.94% as a percentage of our total income for the Financial
Year ended on March 31, 2021, and 99.99% as a percentage of total income for the Financial
Year ended on march 31, 2020.
Other Income
Our other income for the period ended on December 31, 2022, was
Nil. Whereas our other income was 6.37 lakhs which amounted to 0.07% as a percentage of
our total income for the Financial Year ended on March 31, 2022, 11.06 lakhs which
amounted to 0.06% as a percentage of our total income for the Financial Year ended on
March 31, 2021, and 0.64 lakhs which amounted to 0.01% as a percentage of our total income
for the Financial Year ended on March 31, 2020.
Summary of our revenues is as follows:
| Particulars |
For the month ended December |
For the period ended on
March 31, |
|
31, 2022 |
2022 |
2021 |
2020 |
| Income |
|
|
|
|
| Revenue from operations |
1236.85 |
8521.64 |
18016.73 |
12735.06 |
| As a % of total Income |
100.00% |
99.93% |
99.94% |
99.99% |
| Other Income |
- |
6.37 |
11.06 |
0.64 |
| As a % of Total Income |
0.00% |
0.07% |
0.06% |
0.01% |
| Total Revenue |
1236.85 |
8528.00 |
18027.79 |
12735.70 |
Expenditure
Our total expenditure primarily consists of employee benefit expenses,
purchase of stock in trade, and other expenses.
Purchase of Stock in Trade
The expenditure incurred on purchase of stock in trade stood at
Rs. 1,335.18 Lakhs for period ended December 31st, 2022, which was 107.95% of
our total income for the period ended 31st December 2022, Rs. 9033.24 lakhs
which was 105.92% of our total income for financial year ended March 31st,
2022, Rs. 18671.77 lakhs which was 103.57% of our total income for financial year ended
March 31st, 2021, and Rs. 14898.02 lakhs which was 116.98% of our total income
for financial year ended March 31st, 2020. Our Stock in Trade includes Purchase
of chemical goods for the purpose of trading.
Change in Inventories of Finished Goods, WIP and Traded Goods
The Change in Inventories of Finished Goods, WIP and Traded Goods,
amounts to Rs. (222.18) lakhs, (17.96) % of our total income for the period ended on
December 31, 2022, Rs. (668.56) lakhs, (7.84) % of our total income for the period ended
on March 31, 2022, Rs. (850.99) lakhs, (4.72) % of our total income for the period ended
on March 31, 2021, and Rs. (2357.70) lakhs, (18.51) % of our total income for the period
ended on March 31, 2020.
Employment Benefit Expenses
Expenditure incurred on Employee Benefit Expenses were Rs. 39.33 lakhs,
3.18 % of our total income for the period ended on December 31, 2022, Rs. 52.59 lakhs,
0.62% of our total income for the period ended on March 31, 2022, Rs. 45.12 lakhs, 0.25%
of our total income for the period ended on March 31, 2021, and Rs. 43.50 lakhs, 0.34% of
our total income for the period ended on March 31, 2020. It includes Salaries and
allowances, remuneration to directors and staff welfare expenses.
Finance Costs
Finance Costs for the period ended on December 31st, 2022, amounted to
Rs. 0.63 lakhs constituting to 0.05 % of our total income for period ended December 31st,
2022, for the year ended on March 31st, 2022, amounted to Rs. 1.61 lakhs constituting to
0.02 % of our total income for the year ended March 31st, 2022, for the year ended on
March 31st, 2021, amounted to Rs. 0.33 lakhs constituting to 0.00 % of our total income
for the year ended March 31st, 2021, and 0.68 lakhs for year ended March 31st, 2020,
constituting to 0.01% of our total income for year ended March 31st, 2020. Our finance
costs include bank charges and their processing fees.
Depreciation and amortisation
Depreciation and amortisation claimed for the period ended on 31st
December 2022 amounted to Rs.1.16 lakhs constituting to 0.09% of total income for the
period ended on December 31, 2022, for the year ended on 31st March 2022
amounted to Rs. 2.21 Lakhs constituting to 0.03% of the total income for the year ended on
March 31, 2022, for the year ended on 31st March 2021 amounted to Rs. 2.33
lakhs constituting to 0.01% of the total income for the year ended on March 31, 2021 and
for the year ended on 31st March 2020 amounted to Rs. 1.32 lakhs constituting
to 0.01% of the total income for the year ended on March 31st, 2020.
Other Expenses
Other Expenses for the period ended on December 31st, 2022,
amounted to Rs. 34.68 lakhs constituting to 2.80% of our total income for the period ended
on December 31st, 2022, for the year ended on March 31, 2022, amounted to Rs.
74.73 lakhs constituting to 0.88% of the total income for the year ended on March 31,
2022, for the year ended on March 31, 2021, amounted to Rs. 129.91 lakhs constituting
0.72% of the total income for the year ended on March 31, 2021, for the year ended on
March 31, 2020 amounted to Rs. 123.44 lakhs constituting to 0.97% of the total income for
the year ended on march 31, 2020. It ma in ly includes Roc fees, Audit Expense, Legal
& Corporate Fee, and office expenses.
| Particulars |
For the period ended December 31, 2022 |
For the year ended on March
31, |
|
|
2022 |
2021 |
2020 |
| Expenditure |
|
|
|
|
| Purchase of Stock in Trade |
1335.18 |
9033.24 |
18671.77 |
14898.02 |
| As a % of total Income |
107.95% |
105.92% |
103.57% |
116.98 |
| Changes in inventories of Finished |
(222.18) |
(668.56) |
(850.99) |
(2357.70) |
| Goods, WIP and Traded Goods |
|
|
|
|
| As a % of Total Income |
(17.96%) |
(7.84) % |
(4.72) % |
(18.51) % |
| Employee Benefit Expenses |
39.33 |
52.59 |
45.12 |
43.50 |
| As a % of Total Income |
3.18% |
0.62% |
0.25% |
0.34% |
| Finance Cost |
0.63 |
1.61 |
0.33 |
0.68 |
| As % of Total Income |
0.05% |
0.02% |
0.00 |
0.01% |
| Depreciation and amortisation Expense |
1.16 |
2.21 |
2.33 |
1.32 |
| As a % of Total Income |
0.09% |
0.03% |
0.01% |
0.01% |
| Other Expenses |
34.68 |
74.73 |
129.91 |
123.44 |
| As a % of Total Income |
2.80% |
0.88% |
0.72% |
0.97% |
| Total Expenditure |
1188.80 |
8495.82 |
17998.46 |
12709.27 |
| As a % of Total Income |
96.11% |
99.62% |
99.84% |
99.79% |
FISCAL YEAR ENDED MARCH 31, 2022, COMPARED WITH THE FISCAL YEAR ENDED
ON MARCH 31, 2021
Income
Total income has decreased by Rs. 9499.79 lakhs and 52.70% from Rs.
18027.79 lakhs in the fiscal year ended on March 31, 2021, to Rs. 8528.00 Lakhs in the
fiscal year ended on March 31, 2022. The decrease in revenue was on account of COVID-19
pandemic which affected the business of company.
Revenue from operations
Total revenue from operations has decreased by Rs. 9495.10 Lakhs and
52.70% from Rs. 18016.73 Lakhs in the fiscal year ended on March 31, 2021, to Rs. 8521.64
Lakhs for the fiscal year ended on March 31, 2022. The decrease in revenue was on account
of COVID-19 pandemic which affected the business of company.
Other income
Other income has decreased by Rs. 4.69 Lakhs and 42.44% from Rs. 11.06
Lakhs in the fiscal year ended on March 31, 2021 to Rs. 6.37 Lakhs for the fiscal year
ended on March 31, 2022. The decrease in revenue was on account of change in currency
rate.
Expenditure
Total Expenditure decreased by Rs. 9502.65 Lakhs and 52.80%, from Rs.
17998.46 Lakhs in the fiscal year ended on March 31, 2021, to Rs. 8495.82 Lakhs for the
fiscal year ended March 31, 2022. Overall expenditure decreased mainly due to COVID-19 and
decrease in operations of the company.
Purchase of Stock In Trade
Purchase of Stock in trade decreased by 9638.53 Lakhs and 51.62% from
18671.77 Lakhs in the fiscal year ended March 31, 2021, to Rs. 9033.24 Lakhs for the
fiscal year ended on March 31, 2022. Purchase of Stock in Trade was decreased due to
decreased demand in goods.
Change in Inventories of Finished Goods, WIP and Traded Goods
The change in Inventories of Finished Goods, WIP and Traded Goods
increased by Rs. 182.43 Lakhs and 21.44%, from (850.99) lakhs for the fiscal year ended on
31st March 2021 to (668.56) Lakhs for the fiscal year ended on 31st
March 2022.
Employee Benefit Expenses
Employee Benefit Expenses increased by Rs. 7.47 Lakhs and 16.56%, from
45.12 Lakhs in the fiscal year ended March 31, 2021, to Rs. 52.59 Lakhs for the fiscal
year ended March 31, 2022. Overall employee benefitcost was increased due to increase in
no. of employees and increase in general increment in salary & incentives to employees
and directors of the company.
Finance Costs
Finance Costs in terms of value and percentage increased by Rs. 1.28
Lakhs and 382.33% from Rs. 0.33 Lakhs in the fiscal year ended March 31, 2021, to Rs. 1.61
Lakhs for the fiscal year ended on March 31, 2022. Finance Costs was increased mainly due
to bank processing charges and processing fees.
Depreciation & Amortization Expenses
Depreciation in terms of value decreased by Rs 0.12 Lakh and in terms
of percentage decreased by 5.02% from 2.33 Lakhs in the fiscal year ended March 31, 2021
to Rs 2.21 Lakhs for the fiscal year ended March 31, 2022. Decrease in depreciation is due
to decrease in assets of the company.
Other Expenses
Other Direct Expenses in terms of value and percentage decreased by Rs.
55.18 Lakhs and 42.48% respectively from Rs. 129.91 Lakhs in the fiscal year ended March
31, 2021, to Rs. 74.73 Lakhs for the fiscal year ended March 31, 2022.
Profit before exceptional and Extraordinary Items and Tax
Profit / Loss before exceptional and Extraordinary Items and Tax has
increased by 2.86 lakhs in terms of value and 9.74% in terms of percentage from profit of
Rs. 29.33 Lakhs in the fiscal year ended March31, 2021, to Profit of Rs. 32.19 Lakhs for
the year ended March 31, 2022. Profit before exceptional and Extraordinary Items and Tax
was increased due to decrease in expenses of the Company.
Profit before Tax
Profit / Loss before Tax has increased by 2.86 in terms of value lakhs
and 9.74% in terms of percentage from profit of Rs.
29.33 Lakhs in the fiscal year ended March31, 2021, to Profit of Rs.
32.19 Lakhs for the year ended March 31, 2022. Profit Tax was increased due to decrease in
expenses of the Company.
Tax Expenses
Current tax expenses has increased by 0.89 lakhs and 11.65% from 7.63
for the fiscal year ended on March 31, 2021 to 8.52 lakh for the fiscal year ended on
March 31, 2022. Whereas deferred tax for both the years amounted to Rs. (0.26) Lakhs
without any change thereon. Current tax expenses were increased due to increase in income
of company.
Net Profit/ (loss) for the period
Profit / Loss for the period has increased in terms of value and
percentage by 1.97 lakhs and 8.97% respectively from profit of Rs.21.96 Lakhs in the
fiscal year ended March 31, 2021, to profit of Rs. 23.93 Lakhs for the year ended March
31, 2022. Profit for the year increased due to decrease in expenses of the Company.
FISCAL YEAR ENDED MARCH 2021 COMPARED WITH THE FISCAL YEAR ENDED MARCH
31, 2020 Total Income
Total income has increased by Rs.5292.09 lakhs and 41.55 %, from Rs.
12735.70 lakhs in the fiscal year ended on March 31, 2020, to Rs. 18027.79 Lakhs in the
fiscal year ended on March 31, 2021. The increase in revenue was due to increase in demand
of goods which affected the business of company positively.
Revenue from operations
Total revenue from operations has increased by Rs. 5281.67 Lakhs and
41.47 % from Rs. 12735.06 Lakhs in the fiscal year ended on March 31, 2020, to Rs.
18016.73 Lakhs for the fiscal year ended on March 31, 2021. The increase in revenue was
due to increase in demand of goods which affected the business of company positively.
Other income
Other income has increased by Rs10.42 Lakhs and 1629.22% from Rs. 0.64
Lakhs in the fiscal year ended on March 31, 2020, to Rs. 11.06 Lakhs for the fiscal year
ended on March 31, 2021. The increase in other income was on account of change in currency
rate.
Expenditure
Total Expenditure increased by Rs.5289.19 Lakhs and 41.62%, from Rs.
12709.27 Lakhs in the fiscal year ended on March 31, 2020, to Rs. 17998.46 Lakhs for the
fiscal year ended March 31, 2021. Overall expenditure was increased mainly due to increase
in operations of the company.
Purchase of Stock In Trade
Purchase of Stock In Trade increased by 3773.74 Lakhs and 25.33 % from
14898.02 Lakhs in the fiscal year ended March 31, 2020 to Rs. 18671.77 Lakhs for the
fiscal year ended on March 31, 2021. Purchase of Stock in Trade was increased due to
increased demand in goods.
Change in Inventories of Finished Goods, WIP and Traded Goods
The change in Inventories of Finished Goods, WIP and Traded Goods
increased by Rs. 1506.71 Lakhs and 63.91%, from (2357.70) lakhs for the fiscal year ended
on 31st March 2020 to (850.99) Lakhs for the fiscal year ended on 31st
March 2021.
Employee Benefit Expenses
Employee Benefit Expenses increased by Rs. 1.61 Lakhs and 3.71%, from
43.50 Lakhs in the fiscal year ended March 31, 2020, to Rs.45.12 Lakhs for the fiscal year
ended March 31, 2021. Overall employee benefitcost was increased due to increase in no. of
employees and increase in general increment in salary & incentives to employees and
directors of the company.
Finance Costs
Finance Costs in terms of value and percentage decreased by Rs.0.34
Lakhs and 50.56% from Rs.0.68 Lakhs in the fiscal year ended March 31, 2020 to Rs. 0.33
Lakhs for the fiscal year ended on March 31, 2021. Finance Costs was increased mainly due
to higher interest outgo on increased borrowings.
Depreciation & Amortization Expenses
Depreciation in terms of value increased by Rs 1.01 Lakh and in terms
of percentage increased by 76.07% from 1.32 Lakhs in the fiscal year ended March 31, 2020
to Rs 2.33 Lakhs for the fiscal year ended March 31, 2021. Increase in depreciation is due
to increase in assets of the company and is general in nature.
Other Expenses
Other Direct Expenses in terms of value and percentage increased by Rs.
6.47 Lakhs and 5.24% respectively from Rs. 123.44 Lakhs in the fiscal year ended March 31,
2020 to Rs. 129.91 Lakhs for the fiscal year ended March 31, 2021. Other Direct Expenses
was increased due to increase in volume of operation.
Profit before exceptional and Extraordinary Items and Tax
Profit / Loss before exceptional and Extraordinary Items and Tax has
increased by 2.90 lakhs and 10.95% from profit of Rs. 26.43 Lakhs in the fiscal year ended
March31, 2020, to Profit of Rs. 29.33 Lakhs for the year ended March 31, 2021. Profit
before exceptional and Extraordinary Items and Tax was increased due to increase in
expenses of the Company.
Profit before Tax
Profit / Loss exceptional and Extraordinary Items and Tax has increased
by 2.90 lakhs and 10.95% from profit of Rs.26.43 Lakhs in the fiscal year ended March31,
2020, to Profit of Rs. 29.33 Lakhs for the year ended March 31, 2021. Profit before Tax
was increased due to increase in expenses of the Company.
Tax Expenses
Current tax expenses has increased by 0.76 lakhs and 11.06% from 6.87
Lakhs for the fiscal year ended on March 31, 2020 to 7.63 lakh for the fiscal year ended
on March 31, 2021. Whereas deferred tax for the year ending on March 31, 2020 amounted to
Rs. Nil and for the year ended on March 31, 2021, amounted to Rs. (0.26) Lakhs. Current
tax expenses was increased due to increase in income of company.
Net Profit/ (loss) for the period
Profit / Loss for the period has increased by 2.40 lakhs and 12.25%
from profit of Rs.19.56 Lakhs in the fiscal year ended March31, 2020 to profit of Rs.
21.96 Lakhs for the year ended March 31, 2021. Profit for the year increased due to
increase in operations of the company.
QUANTITATIVE AND QUALITATIVE DISCLOSURES
Unusual or infrequent events or transactions.
Except as described in this Draft Prospectus, during the period under
review there have been no events or transactions, which in our best judgement would
consider unusual or infrequent on account of business activity, unusual items of income,
change of accounting policies and discretionary reduction of expenses.
Significant economic changes that materially affected or are likely to
affect income from continuing operations.
Our business has been subject, and we expect it to continue to be
subject, to significant economic changes arising from the trends identified above in
‘Significant Factors affecting our Results of Operations and the uncertainties
described in the section entitled ‘Risk Factors beginning on page
25 of the Draft Prospectus.
To our knowledge, except as we have described in the Draft Prospectus,
there are no known factors which we expect to bring about significant economic changes
that could materially affect or are likely to affect income from continuing
operations.
Known trends or uncertainties that have had or are expected to have a
material adverse impact on sales, revenue or income from continuing operations.
Except as mentioned above and other than as described in this Draft
Prospectus, particularly in the section titled ‘Risk Factors and
this ‘Managements Discussion and Analysis of Financial Position and
Results of Operations beginning on page 25 and 148 , respectively of this
Draft Prospectus, to our knowledge, there are no known trends or uncertainties that are
expected to have a material adverse impact on our sales, revenues or income from
continuing operations.
Future relationship between cost and income
Our Companys future costs and revenues will be determined by
demand/supply situation, government policies.
Increase in net sales or revenue and Introduction of new products or
services or increased in sales prices.
Increases in revenue are by and large linked to increase in volume of
business and inception of new varieties of products.
Status of any publicly announced new products or business segment.
Our Company has not announced any new product and segment, except
otherwise disclosed in this Draft Prospectus.
Competitive conditions
We face competition from existing and potential competitors which is
common for any business. We have, over a period of time, developed certain competitors who
have been discussed in section titled ‘Our Business beginning on
page 88 of this Draft Prospectus.
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