MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Our Company "Gujarat Intrux Limited" is engaged in
Manufacturing and supply of stainless steel, Non-Alloy Steel and alloy steel Castings. The
company caters its products mainly to valve industries; the plant is equipped with all
necessary infrastructure, equipment, and machineries. The company is connected with 1800
KVA high tension power Connection.
The Company has in place adequate systems of internal control and
documented procedures covering all financial and operating functions. These have been
designed to provide reasonable assurance with regard to maintaining proper accounting
controls, monitoring economy and efficiency of operations, protecting assets from
unauthorized use or losses, and ensuring reliability of financial and operational
information.
An Audit Committee of the Board of Directors comprising of Independent
Directors and Whole Time Directors has reviewed regularly the audit plans, significant
audit findings, adequacy of internal controls as well as compliance with Accounting
Standards.
In line with the companys philosophy and strategic focus on human
resource (HR) development, the business has been placing much emphasis on people
development, engagement and building leadership for the future. The business has been
continuously focusing on the attraction, retention and engagement of talent, the prime
mover of success for the business. This helps to meet the evolving complexities and
challenges which company faces.
INDUSTRY STRUCTURE AND DEVLOPMENTS:
India represents one of the largest metal casting markets in the Asia
Pacific region. India is one of the largest producers of metal casted products. Our
company manufactures Steel and Alloy steel Sand casting single piece weight from 20 Kgs.
to 3300 kgs. The demand of products is growing and we focus on more profitable items in
valves and earth moving parts.
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL
PERFORMANCE
Financial Performance is high lighted as under:
| Particulars |
2022-2023 |
2021-2022 |
% wise Up/Down |
| Production(in MT) |
1174.02 |
1071.52 |
9.57% Up |
| Export Sales (Rs. In Lakhs) |
2356.41 |
2122.08 |
11.04% Up |
| Domestic Sales (Rs. In Lakhs) |
2485.79 |
1982.44 |
25.39% Up |
| Total Sales (Rs. In Lakhs) |
4842.20 |
4104.52 |
17.97% Up |
| Other Income (Rs. In Lakhs) |
92.92 |
97.73 |
4.92% Down |
| Earnings Per Share |
16.67 |
8.89 |
87.51% Up |
| Dividend % |
100% |
30% |
- |
During the year 2022-2023 Company has performed well and registered
strong and positive top line compare to previous year.
This financial year in 2022-2023, Production is increased by more than
9.57% compare to previous year where as export and domestic sales numbers are also greater
than previous year.
The Companys operational functions are well designed and having almost
all facilities in house i.e. Two induction furnace, Moulding Unit, Sand-Reclamation Plant,
Shot Blasting Unit, Heat Treatment, MPI, PMI, UT, RT, SPECTRO, IGCT, FARO and fully
equiped Machine Shop having CNC, VMC, VTL and HMC etc..
FINANCIAL RATIOS
The significant changes in the financial ratios of the Company, which
are more than 25% compared to the previous year are summarised below.
| RATIO |
Particulars |
FY 2021-2022 |
FY 2022-2023 |
CHANGE IN % |
REASON FOR
CHANGE |
| Interest Coverage Ratio |
Standalone |
70.16 |
539.03 |
468.86 |
Ratio is positive due to
interest expenses have been reduced comparing to last year, although EBIT has gone up
comparing to last year. |
In furtherance, details relating to other financial ratios declose in
note no 17 of financial statements.
CHANGE IN RETURN ON NET WORTH
The return on Net worth for the financial year 2022-23 has increased
from 88.74% to 167.04% as compare to preceding financial year as profit of the Company has
increased.
DISCLOSURE OF ACCOUNTING TREATMENT
The financial statements of the company are prepared as per the
prescribed accounting standards and no other treatment or practices are being followed.
SEGMENT/PRODUCT WISE PERFORMANCE
The company has only one segment i.e. Sand Casting unit only. The
Company has total sales of RS.4842.20 Lacs in compare to previous year of Rs.4104.52Lacs.
That clearly indicates that your company very well managed to generate almost around
17.97% greater sales than previous year. Industry wise Revenue Contribution :The Company
has generated Major of its Revenue from Valve Industries. Geographic Revenue Contribution
: Export 48.66% Domestic 51.34% FUTURE OUTLOOK
With the launch of the National Mineral Policy 2019 and the Mines and
Minerals (Development and Regulation) Amendment Act 2021, India presents a major
opportunity for investors looking to invest in the metal industry in India.
The Metals and Mining sector in India is expected to witness a major
reform in the next few years. Iron & Steel industry is the segment of secondary
producers which contributes more than 40% to the production of crude steel. The role of
secondary steel sector in infrastructure development is immense.
In spite of a downturn in the Global demand, Indian demand could
survive showing an upward trend, setting a road ahead for the growth of the domestic
industry in the long run.
Company shall continue to be quality Steel and Alloy Steels casting
manufacture through innovative and improved technology and method. We aim to take our
Quality Management System, Technology and commitment to the next level. The Company has
strengthened its safety policy, performance stability and also expecting to get rise in
the market situation.
OPPORTUNITIES AND THREATS
The company is mainly producing castings which are used in valves
industries and demand are growing and company marketing team are constantly making efforts
for capture market thereof. The company has added in-house machine shop facilities for
catering demand of machining parts.
One of the main challenges of the steel industries is it is highly
capital and labour intensive. Yet another challenge of the steel industry is fluctuating
demand. As it fluctuates from time to time, it becomes difficult for steel makers to
predict the demand and produce accordingly. This results in delayed returns on investment.
Like most other industries, logistics, and supply chain management remain key areas of
challenge for the steel industry. The steel industry is known to be an extremely
energy-intensive industry. In fact, it is known to be the second most energy-intensive
industry after the chemical sector.
RISK FACTORS
The Key risks are global demand scenario, domestic demand, economic
slowdown, increase in financial charges, non- availability or undue increase in cost of
raw materials, and labour etc., coupled with market fluctuations. The Company does not
apprehend any inherent risk in the long run, with the exception of certain primary
concerns that have afflicted the progress of our industry in general, like: Rising
manpower and material costs.
Further, India observing volatility in oil prices, nickel prices and
other metal prices. In such case India may face upward inflation, which may impact
Companys performance. Further, fluctuation in exchange rate, liquidity issues, rising
power and labour cost continues to be key challenge for the industry.
Additionally, migration of skilled workers and getting fresh workers
and training them to efficient level which may likely to give impact of the performance of
the Company.
Your Company regularly monitors the various risks associated with its
business and the company continues to take suitable steps to minimize risks and their
impact on Companys overall performance.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company believes in systematic working and placing of proper
checks. The Company has proper and adequate system of internal controls commensurate with
its size and nature of operations to provide reasonable assurance that all assets are safe
guarded, transactions are authorised, recorded and reported properly. The internal
auditors of the company conducts audit of various department and areas. The Internal Audit
Department reports its findings and observations to the Audit Committee which meets to
review the audit issues and to follow up implementation of corrective actions. The
statutory auditors also provide assurance on the adequacy of the internal control systems
in the Company.
LEGAL COMPLIANCE TOOL
In order to ensure transparency and full compliance of the applicable
laws, Company has developed a comprehensive tool which covers the entire gamut of
compliances applicable to the companys business. The same has been made operational
during the year under review. This tool will enable the company to track and ensure
compliance to the regulations in the prescribed time frame. At the same time, it also
provides opportunity to develop an efficient plan for go to market strategy for its
projects.
QUALITY OF PRODUCTS
The Gujarat Intrux Limited is known for quality excellence. Entire
companys manufacturing process takes extreme care for providing quality. Your Company has
achieved benchmark in providing quality casting. The Company has only motto of providing
quality casting. The Company has separate and dedicated team to assure desired quality and
we are maintaining it.
Certifications
| 01 |
ISO 9001:2015 |
Approved by TUV Nord |
| 02 |
ISO 14001:2015 |
Approved by TUV Nord |
| 03 |
ISO 45001:2018 |
Approved by TUV Nord |
| 04 |
PED |
Approved by TUV Nord |
| 05 |
AD2000-WO |
Approved by TUV Nord |
| 06 |
Lloyds |
Approved by Lloyds Marine
Division |
| 07 |
DNV-GL |
Approved by DNV-GL |
| 08 |
NORSOK |
Approved by TUV Nord |
| 09 |
IBR WELL KNOWN |
Approved by Central Boiler Board |
| 10 |
ABS |
Approved by ABS foundry Facility
& Process Approval |
HUMAN RESOURCE AND DEVLOPMENT
Human Resources Department works continuously for maintaining healthy
working relationship with the workers and other staff members. The underlying principle is
that workers and staff at all levels are equally instrumental in attaining the Companys
goals. Training programmes are regularly conducted to update their skills and apprise them
of latest techniques. Senior management is easily accessible for counseling and redressal
of grievances. The HR department continuously strives to maintain and promote harmony and
co-ordination among workers, staff and members of the senior management.
The Company has taken a group policy of the employees and Company is
very co-operative with the employees. The HR department of the Company is continuously in
touch with the employees to guide them and solve their problems.
The Company is always focuses toward the workforce. Your Company has
created performance based culture within the organization and emphasize on employees
training and development. During the year under review Company has maintained healthy and
cordial industrial relations.
The Company located at National Highway Rajkot-Gondal and due to its
location, the company get skilled manpower at minimal cost. The companys total manpower
comprised 223 employees as on 31st March, 2023. The average age of 84.75% of employees was
between 18-45 years as on 31st March, 2023. The company has professionals comprising the
following competencies: Metallurgy, Mechanical, finance, sales, operations, quality
assurance, procurement and others. CORPORATE SOCIAL RESPONSIBILITY
Your Company is committed to conduct its business in a socially
responsible manner irrespective of statutory obligation. During the year company has
contributed in the healthcare sector. Further Companys Corporate Social Responsibility
Committee regularly reviews the Companys CSR Policy. CSR Policy is available at the web
site of the Company at http://www.gujaratintrux.com/investors.php
EXPORTS
The company has always makes way for large export irrespective of
market scenario, in the year under review company has marginal expanded ratio of export
too. Your company having dedicated marketing team which focusing on continual relation
with the customers with ethics and complying with commitments.The company is regularly
participating at international exhibition. As compare to last year companys export
increased by 11.04%. The Company has reported remarkable export sales in F.Y.22-23 48.66%
of total sales catering revenue from six countries i.e. Germany, Israel, USA, UK, Spain,
and Finland.
CAUTIONARY STATEMENT
The Management Discussions and Analysis describe Companys projections,
expectations or predictions and forward looking statements are within the meaning of
applicable laws and regulations. Actual results could differ materially from those
expressed or implied. Important factors that could make a difference to the Companys
operations include economic conditions affecting demand and supply and price conditions in
domestic and international market, changes in Government regulations, tax regimes,
economic developments and other related and incidental factors.
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