The Management Discussion & Analysis Report for the Financial Year ended 31st
March, 2023 as required under Regulation 34 of the Securities & Exchange Board of
India (Listing Obligations & Disclosure Requirements) Regulations, 2015, read with
Schedule V to the said Regulations, is presented below:
1. Industry Structure & Developments
The severe disruption in the supply chain on a global scale, which affected most
manufacturing industries including your Company in the last financial year, continued
during the year under review and became even more pronounced on account of the sharp
increase in various input material costs, cost of logistics and extremely long lead time.
The Ukraine war also added to the difficulties, causing a sharp increase in the cost of
all imported raw material and components and an uncertain delivery time.
Despite such unfavourable situation, the revenue from operations for the year under
review has increased to Rs. 22256 lakhs as against Rs. 16889 lakhs for the previous year
and which resulted in a profit before tax of Rs. 1210 lakhs for the year under review as
against a profit before tax of Rs. 527 lakhs for the previous year.
The improved performance of the Company for the year under review, in the backdrop of
these two major unprecedented challenges of disruption in supply chain and sharp increase
of input costs, has been possible only because of the extra-ordinary efforts by the
management and strong commitments of all employees.
2. Strength & Opportunities
For the products manufactured by Heavy Engineering Division & Gear Box and Geared
Motor Division, your Company is recognised as a technology leader. The Company, however,
is consistently upgrading its technology for the products of these divisions.
The manufacture of various building material products such as Dry Mortars with advanced
technology under licence agreement from CAPA, Spain, have received excellent market
response and acceptance, which has resulted in the increase in turnover of the Building
Material Division during the year under review, though the Division is yet to break-even.
The requirement of such high end products are expected to grow further in the coming
years.
3. Threats
One has to recognise that a big part of the operations of the Company is supply of
capital machinery to various projects in the core sector industries such as steel plants,
mining industry, etc. Unfortunately, the time lag between finalisation of order, supply of
the machinery and commissioning of the same is substantial and the unstable and rising
input costs always poses a big challenge before the Company. However, since the last
quarter of the Financial Year 2022-23, the prices of most of the input material is showing
a trend of stabilising and significant improvement has been noticed with regard to
reliability of supply chain infrastructure.
4. Risks & Concerns
The Risk Management Plan adopted by the Board specifies periodic identification of
risks likely to affect the business adversely, rating the risks, their importance, risk
identification procedures and implementation of risk mitigation plans. The executive
management is continuously monitoring the identification of the risks in various business
areas & is also developing various mitigation strategies & plans in these areas to
reduce or eliminate the likelihood of such risks.
The presence in India of players with low cost products has intensified the competition
in the large domestic market consequently shrinking the margin for the Companys products.
Managing the Companys funds and liquidity is also a key factor. Therefore, collection
of sale proceeds promptly from the customers is also considered as an area where risk is
involved. Paucity of funds of our customers in various sectors particularly in the steel
industry is a cause for concern.
5. Outlook
The order intake position of all Divisions of the Company continues to grow strongly
and the growth trend is expected to continue in the current financial year.
The challenge at present is that the Companys existing manufacturing and supply chain
infrastructure is not adequate to meet the rapidly increasing demand. Keeping this in
view, the Company has initiated necessary steps to augment both manufacturing and supply
chain infrastructure.
Also, at Aurangabad works, a new initiative, with the support of Bauer, has been taken
to introduce Lean Manufacturing System in all areas of operation to enhance productivity
and for better utilisation of resources. The products manufactured by the Building
Material Division of the Company, both developed indigenously and manufactured under
license from Cementos CAPA, are recognised to be of highest quality standard. The Company
till date has been active mainly in retail market and currently there is strong increase
in interest from a number of leading construction companies to use the products
manufactured by the Company for various major projects across the country. The Company is
also increasing the product range of Building Material Division to have a greater access
to both retail and project market.
6. Internal Control Systems and their Adequacy
The Company has an established Internal Financial Control System commensurate with its
size and nature of operations to ensure that all assets are safeguarded and the system has
been designed in order to ensure orderly and efficient conduct of its businesses, the
accuracy and completeness of its accounting records and timely preparation of reliable
accounting and financial information.
The system also ensures compliance with applicable statutory policies, viz. the Code of
Conduct of the Company, Vigil Mechanism (Whistle-Blower Policy), the Related Party
Transactions Policy and the Risk Management Plan and other corporate policies.
The Internal Control Systems are routinely tested by the Management, the Statutory
Auditors and the Internal Auditors, who submit their Reports on half-yearly basis to the
Management and the Audit Committee. The Audit Committee reviews the reports of the
Internal Auditors and addresses significant issues raised by both the Internal Auditors
and the Statutory Auditors.
The Committee also follows up the implementation of the corrective actions suggested by
the Auditors in order to ensure the adequacy of the Internal Control Systems.
7. Financial /Operational Performance
( Rs. in lakh)
| Particulars |
2022-2023 |
2021-2022 |
| Revenue from Operations |
22256 |
16889 |
| Profit/(Loss) Before Tax |
1210 |
527 |
| Exceptional Items |
- |
- |
| Profit/(Loss) after Tax |
831 |
415 |
| Net Cash Flow from Operations |
483 |
839 |
| Profit/ (Loss) Before Tax to Sale (%) |
5.44 |
3.12 |
| Basic E.P.S. (Rs.) |
34.76 |
17.37 |
8. Segment-wise Performance
( in lakh)
| Particulars |
2022-2023 |
2021-2022 |
| Segment revenue (Sales & Other Operating Income) |
|
|
| a) Mineral & Material processing & Handling Equipment |
13600 |
10021 |
| b) Geared Motor and Gear Box |
6896 |
5399 |
| c) Building Material |
2121 |
1553 |
| Net Sales/Income & Inter-Divisional Transfer |
22617 |
16973 |
| Less: Inter-Segment Transfer |
361 |
84 |
| Net Sales/Income from Operations |
22256 |
16889 |
| Segment Result (Profit before Tax & Interest) |
|
|
| a) Mineral & Material processing & Handling Equipment |
3459 |
2653 |
| b) Geared Motor and Gear Box |
436 |
295 |
| c) Building Material |
(226) |
(300) |
| Total |
3670 |
2648 |
| Less : Finance Cost |
203 |
169 |
| Other Unallocable Expenditure, net of unallocable Income |
2257 |
1952 |
| Total Profit/(Loss) before Tax |
1210 |
527 |
9. Details of Key Financial Ratios & Return on the Net Worth
Details of Key Financial Ratios, alongwith detailed explanations for significant
changes (i.e. change of 25% or more as compared to the immediately previous financial
year) and Return on Net Worth, alongwith detailed explanations for any changes in the same
as compared to the immediately previous financial year are given below:-
| Sl. No. |
Particulars |
Current FY ended March 31, 2023 |
Previous FY ended March 31, 2022 |
% Change between Current FY & Previous FY |
| 1 |
Debtors Turnover Ratio |
5.31 |
5.08 |
4.53% |
| 2 |
Inventory Turnover Ratio |
4.45 |
3.76 |
18.35% |
| 3 |
Interest Coverage Ratio |
6.95 |
4.12 |
68.69% |
| 4 |
Current Ratio |
1.83 |
1.91 |
(4.19)% |
| 5 |
Debt Equity Ratio |
0.13 |
0.09 |
44.44% |
| 6 |
Operating Profit Margin (%) |
5.91% |
3.54% |
66.95% |
| 7 |
Net Profit Margin (%) |
3.72% |
2.44% |
52.46% |
| 8 |
Return on Net Worth (%) |
8.50% |
4.53% |
87.64% |
Notes:
1. The above ratios are based on the financial statements of the Company.
2. Previous years figures have been rearranged wherever necessary.
3. Interest Coverage Ratio improved substantially during the Financial Year 2022-23 due
to higher Earnings before Interest & Taxes during the said financial year.
4. Debt-Equity Ratio has deteriorated ever so slightly during the Financial Year
2022-23, mainly due to the higher working capital / cash credit/ overdraft requirements
during the said financial year, which was necessitated on account of the higher sales
turnover & higher level of volume / activity during the said year.
5. Due to the much higher sales turnover during the year under review resulting in
substantially higher profits, the operating profit margin during the said year showed
significant improvement.
6. Due to the much higher sales turnover during the year under review resulting in
substantially higher profits, the net profit margin during the said year showed
significant improvement.
7. Due to the much higher sales turnover during the year under review resulting in
substantially higher profits, the return on net worth during the said year showed
significant improvement.
8. Thus, almost all the ratios have shown significant improvement during the year under
review due to the much better financial performance of the Company.
10. Human Resources/Industrial Relations
The various Human Resources development programmes undertaken by the Company for all
its Divisions and operational areas would lead to development, optimization and efficient
engagement of the human resources.
Industrial Relations for the year under review at all units of the Company remained
cordial.
The number of personnel employed by the Company across all its units and offices was
533 as on 31st March, 2023.
11. Cautionary Statement
Certain statements in this reports relating to Companys objectives, outlooks,
projections, expectations etc. may be "forward looking statements" within the
meaning of the applicable laws and regulations. Although the Company believes that the
expectations reflected in such "forward looking statements" are reasonable, the
Company does not and cannot guarantee the accuracy of various assumptions underlying such
expectations. Accordingly, actual results or performance could differ materially from such
expectations, projections etc., whether expressed or modified, due to changes in global
economy and business conditions, changes in political environment, changes in Government
regulations, tax laws, external economic condition affecting demand and supply, price
conditions in the market in which the Company operates, natural phenomena such as flood
and earthquake, customers strategies etc. over which the Company does not have any
control. The Company does not assume any responsibility/ obligation in respect of such
forward-looking statement which may undergo changes in future on the basis of subsequent
developments or events.
|
|
For & on behalf of the Board |
| Place: |
Kolkata |
S. Bagaria |
| Date: |
25th May, 2023 |
Chairman |
+91-9892691696
