indsil hydro power manganese ltd Management discussions

ANNEXURE- 9

[Regulation 34 read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015]

A. INDUSTRY STRUCTURE AND DEVELOPMENTS

The Company is a part of the ferro alloy industry. Ferro alloys refer to a range of compounds that find application in producing steel and stainless steel. Manganese, chrome and silicon alloys form a majority of the bulk of ferro alloys produced. While chromium alloys are used in the production of stainless steel, manganese alloys are used in the production of steel and some specialized grades of manganese alloys are used in specific grades of stainless-steel making.

Your Company on a standalone basis produces specialized varieties of Manganese Alloys, regular Manganese Alloys and Ferro Chrome.

B. OPPORTUNITIES AND THREATS

Opportunities :

The year 2022-23 witnessed very tepid market conditions for alloys like silicon, chrome and manganese. On account of measures taken like selling the Chhattisgarh asset and reduction of statutory liabilities, the Companys interest burden came down significantly and has helped cushion part of the down trend in terms of its financials.

Threats :

The markets for steel, stainless steel and consequently markets for alloys like manganese, chrome and silicon are going through an uncertain phase on account of recessionary trends in key markets. Europe has been witnessing continuous slow down and pick up of alloys from that region has come down drastically. The Chinese economy has not been doing too well and is expected to further sour market sentiments.

The Indian domestic market in terms of consumption has remained stable. However, price realizations have been coming down.

C. SEGMENT WISE PERFORMANCE - SMELTER DIVISION

The table given below gives the operational details of the two segments of your Company viz., ferro alloy segment and power segment

Particulars	Ferro Alloy	Hydro Power
Production (MT) / (Units)	20480 MT	63.92 Million Units
Sales (MT) / (Units)	20536 MT	52.87 Million Units
Revenue in Lakhs	17682	2432
PBDIT in Lakhs	187	1737

Your Company earned EBITDA of Rs. 15.45 Crores on a Consolidated basis.

POWER DIVISION

As far as the Hydro Power Station is concerned, the power generation was 63.92 Million Units and as compared to the previous year 60.31 Million Units and as compared to average generation of 41.98 Million Units per year.

D. OUTLOOK

The outlook for both the manganese and chrome industry looks uncertain because of the economic conditions in Europe and China.

E. RISKS AND CONCERNS

Already dealt with under threat.

F. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

i) COST CONTROL

Every single cost item goes through a thorough internal audit and in several stages as well. As part of the cost control system, every single aspect of costs goes through stringent pre-expenditure checks and audits as well.

ii) OPERATIONS

Process and deliverables pass through stringent control systems on a continuous basis. These systems are highly adequate and infact play a vital role in productivity, growth, efficiency, improvement etc.,

G. CAUTIONARY FORWARD-LOOKING STATEMENTS

The Company makes forward-looking statements that are subject to risks and uncertainties. All statements that address expectations or projections about the future, including, but not limited to, statements about the Companys strategy for growth, market position and financial results are forward-looking statements.

For those statements the Company cautions that numerous important factors could affect the Companys actual results and could cause its results to differ materially from those expressed in any such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent developments, information or events.

H. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

in Lakhs

Particulars	31st March 2019	31st March 2020	31st March 2021	31st March 2022	31st March 2023
I. OPERATING RESULTS:
1. Sales	22,365	12,768	6,103	20,843	17,682
2. Operating Profit (PBIDT)	3,113	(228)	1,457	4,613	1,925
3. Interest	2,138	2,094	1,950	1,572	1,358
4. Depreciation	699	679	692	509	421
5. Taxes	272	(107)	(353)	(730)	670
6. Net Income (PAT)	4	(2,215)	(3,744)	3,263	(524)
7. Dividend Percentage	-	-	-	-	-
Dividend Amount	-	-	-	-	-
8. Production
Ferro Alloys (MT)	25,503	16,904	8,688	19,990	20,480
Power (Lakh KWH)	534.90	379.00	473.1	603.11	639.24

II. PERFORMANCE PARAMETERS

Particulars	31st March, 2019	31st March, 2020	31st March, 2021	31st March 2022	31st March 2023
1. Share Capital	4,277	4,279	4,279	4,279	4,279
2. Reserves & Surplus	13,036	10,666	6,922	10,037	9,423
3. Secured Loans	12,875	13,179	13,967	10,658	10,499
4. Deferred Liabilities / (Asset)	313	206	(146)	877	933
5. Fixed Assets (Gross Block)	20,954	21,934	21,774	15,976	15,993
6. Accumulated Depreciation	(12,182)	(12,205)	(12,885)	(9,478)	(9,885)
7. Investments	4,048	4,044	4,044	3,997	3,996
8. Net Current Assets	5,643	1,059	2,523	5,919	3,880

 

Particulars	31st March, 2019	31st March, 2020	31st March, 2021	31st March 2022	31st March 2023
III. RATIOS
1. Profit after tax / sales (%)	0.01	(17.35)	(61.36)	15.65	(2.96)
2. Return on Net Worth (%)	0.03	(79.70)	(33.43)	22.79	(3.82)
3. Earnings per Share ( )	0.02	(7.97)	(13.47)	11.79	(1.88)
4. Cash Earnings per share ( )	2.53	(5.53)	(10.98)	13.57	(0.37)
5. Debt Equity Ratio	0.65	0.88	1.25	0.74	0.77
6. Book Value Per Share ( )	62.35	53.78	40.30	51.51	49.30

I. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

Number of people employed - 214

Your Company has always endeavoured to retain quality manpower talent. Conscious efforts are on to develop a HR policy, accordingly, giving thrust for effective participation of potential human resources at all levels in the activities of the Company.

The HR policy has been designed so as to give thrust on a transparent and performance-driven work culture which ensures challenges and opportunities for the deserving.

The Copany in fact, adopts intensive selection process to ensure that best talents with great attitude are recruited so that the culture of teamwork and dedication remain intact.

J. FINANCIAL RATIOS

The Key Financial ratios of the Company are given below with explanation in case of significant changes

Financial Ratio	FY 2022-23	FY 2021-22	% Change in FY 2022-23 compared to FY 2021-22	Reason for change
Debtors Turnover (Days)	19	17	11.7%	The change was on account of a drop in the selling price which impacted realisations and the operating margin of the company.
Inventory Turnover (Days)	253	234	8%
Interest Coverage (Ratio)	28	28	-
Current Ratio	1.39	1.36	0.03%
Debt Equity Ratio	0.77	0.74	0.76%
Operating Profit Margin (%) (EBIDTA after OCI and exceptional item / Total Revenue)	10.89	22.13%	(11.24%)
Net Profit Margin (%)	(2.97)	14.40%	(17.37%)
Return on Net Worth (%) (PAT after OCI / Net Worth)	(3.83)	22.18%	(26.01%)