clio infotech ltd Management discussions

Your Directors are pleased to present the Management Discussion and Analysis Report for the year ended 31^st March, 2023. Investors are cautioned that these discussions contain certain forward looking statements that involve risk and uncertainties including those risks which are inherent in the Companys growth and strategy. The company undertakes no obligation to publicly update or revise any of the opinions or forward looking statements expressed in this report consequent to new information or developments, events or otherwise.

1. Industry Overview:

The world Economy continues to face challenged on the road to sustained recovery due to the vast and seemingly everlasting impact of COVID 19 pandemic. Advanced Economies that seemed towards the fag-end of the year and this uncertainty is clouding the prospectus for global growth during the year 2023. The Growth momentum was impacted as the protracted debt crisis in the euro area and the fiscal fragilities dampened and consumer confidence. The economic crisis and its ramifications have accelerated the shift of economic power from the developed to the emergingnationsandexposedafragileworldwithlimitedcapacitytorespondto systematic risks.TheConsequences has been volatile and low growth which is likely to stay for some time to come.

2. Opportunities and Threats

The company is mainly exposed to market risk, interest risk, credit risk. However, prudent business and risk management practices followed by the company over the years helps it to manage normal industry risk factors which includes economic/business cycle, fluctuations in the stock prices in the market besides the interest rate volatility. The COVID-19 pandemic could be one of the most serious challenges faced by the Company in nearly a century and posed a major threat to the business of the Company. However, the company hopes to improve its performance on the strength of its long experience and its strong emphasis on the fundamentals.

3. Segment wise performance

Due to heavy competition and margin pressure, presently most of the revenues are generated from Companys traditional other business activities. Company believes in stretching itself and put stress on cost cutting strive to survive in this world of stiff competition.

4. Future Outlook:

With improving business prospects at both local and global level, Prospects for Indian Industries looks bright. But banking sector globally is under pressure though with government s effective regulatory measures taking control of the situation things may improve for the best.

5. Risks & Concern

Risks are events, situations or circumstances which may lead to negative consequences on a Companys business. Risk management is a structured approach to manage uncertainty. It involves identifying potential risks, assessing their potential impact, taking timely action to minimize potential impact and continuous monitoring of identified risks. Your Company has a robust risk management process to identify and assess business risks and opportunities. Your Companys risk management plan describes the potential risk, contains an analysis of the impact of risks and includes risk strategies to help the business reduce the consequences. The risk management plan of your Company is regularly reviewed to ensure that it accurately reflects the current potential risks to its business. The COVID-19 outbreak was declared a global pandemic by the World Health Organization in the last month of FY 2020, the COVID-19 pandemic developed rapidly into a global crisis and has disrupted every business in every industry and no company is an exception. The Indian Government has taken a series of measures to contain the outbreak, which included imposing multiple lock-downs across the country, from March 22, 2020 and has implemented strict guidelines on undertaking necessary precautionary measures for social distancing, limited manpower, staggered working, work from home, regular screening and sanitization, preventive healthcare, health checkups and necessary guidance and advisory for providing a safe working environment to all. Since the situation is exceptional, it may not be possible to estimate the future impact on its operations with certainty.

6. Internal Control Systems:

Your Company has adequate internal control procedures to commensurate with the nature and size of its business. Procedures ensure efficient and costeffective use of companys resources. Company has developed proper procedures to safeguard companys valuable assets against losses, to ensure timely and accurate preparation of accounts and compliances of various rules and regulations.

7. Financial Performance:

Share Capital:

The Paid up Share Capital of the Company as on 31^st March, 2023 stands at Rs.110,109,500/-divided into 11010950 equity shares of Rs. 10/- each fully paid up.

 

Reserves and Surplus:

The Reserves and Surplus is Rs. -60.20 Lakhs as on the end of the Current year.

 

Total Income:

During the year under consideration, total income is Rs. 26.57 Lakhs.

8. EmployeeRelations:

Company had smooth relations with its employees during the year under review

9. Material Development in HumanResource

The Company continues to have excellent employee relations. Your Directors acknowledge and thank the employees for their continuous support. The Company has strong commitments to follow the best of the HR practices and believes in uplifting the overall competence of its employees through regular training, workshops andseminars.

10. 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 thereof:

Particulars	FY 2023	FY 2022	Reason
Debtors Turnover	N.A	N.A	As Company doesn t have any O/s Trade Receivable as on
			31/03/2023 and 31/03/2022.
Inventory Turnover	0.50 times	0.00 times	Inventory Turnover Increased to 0.50 Times as company made Sale of Rs. 1.84 Lakhs during FY
			2022-23 as Compared to NIL sales during FY 2021-22.
Interest CoverageRatio	0.36 times	(0.90) times	Interest Expenses Reduced From 50.23 Lakhs in FY
			2021-22 to Rs. 46.91 Lakhs in FY 2022-23 and EBIT
			Increase From Rs. -4.74 Lakhs in FY 2021-22 to Rs.
			16.77 Lakhs in FY 2022-23 result in Increase in
			Interest Coverage Ration from -0.09 time to 0.36 times.
Current Ratio	26.24 times	3.84 times	Current Ratio increase from 3.84 time to 26.24 time due to better realization of other current asset and decrease borrowing during FY 2022-23
Debt Equity Ratio	0.53 times	0.71 times	Debit Equity ratio decrease from 0.71 time to 0.53 time as Total borrowing of the Company reduced From Rs. 762.52 Lakhs to Rs. 549.61 Lakhs during FY 2022-23.
Operating Profit Margin	-1640.15%	N.A.	The Operating Profit Ratio is Negative in FY 2022-23
(%)			due to Loss of Rs. 30.14 Lakhs during the Year.
Net Profit Margin (%)	(113.42%)	(573.22%)	Net Profit Margin Ratio reduced From 573.22% in FY 2021-22 to
			113.42 % in FY 2022-23 as Net Loss decrease from 54.97 Lakhs in FY 2021-22 to 30.14
			Lakhs in FY 2022-23 and Increase in Sale from NIL FY 2021-22 to
			Rs. 1.84 Lakhs in FY 2022-23.

11. Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof:

Particular	FY 2022-23	FY 2021-22
Return on Net Worth as compared to the immediately previous	(2.81) %	-5.13%
financial year

Company has incurred losses during the year and RONW is negative, however there is no Major Change in RONW as compared to previous year.

By Order of the Board

For Clio Infotech Limited