rkec projects ltd Management discussions

Industry Structure and Developments:

A Scenario

Global and Indian Economy:

The food industry was significantly impacted by high commodity prices, rising interest rates and the continuing impact of Russia-Ukraine war during the year. Further, the long-term effects of these factors continue to be felt extensively, giving rise to fears of an impending recession in major economies. Although commodity prices were volatile and inflation was at unprecedented levels, the post-covid normalization of economic activities supported growth throughout the year. India was one of the fastest growing economies in the world with robust domestic demand backed by significant investments in infrastructure. During the year, the major challenge confronting the food industry was managing inflation in the cost of key commodities like wheat, milk, sugar, palm oil and crude oil, all of which were trading at multi-year high prices. Your Company was able to successfully navigate these challenging circumstances and deliver strong performance through focused efforts, robust cost efficiency programs, brand marketing and timely price increases.

Company Overview:

Established in 1972, it is a pioneer in Industrial production and sale of Dehydrated Vegetables and herbs in India. With one the most modern plants in the industry, it caters many leading MNCs in the food segment for their procurement in the domestic and international market. Incorporated in 1993, our Company, as “Gujarat Oceanic Foods Private Limited” is engaged in manufacturing and processing of Dehydrated Food Products. Thereafter in the Year 1994, there was a change in the name of Company as “Oceanic Foods Private Limited” and in the Year 2016, the status of the Company got converted from “Private Limited” to “Public Limited”. At the day of 31st March 2017, our Company got listed on the SME Platform of BSE Limited. Further to that, in the Year 2019, our Company was Migrated to Main Board of BSE Limited. We currently have two manufacturing units. Unit I situated at Lalpur spread over 5 acres of land is an automated plant which carries primary process of dehydration like peeling, washing, slicing and steam drying under ozone environment and Unit II situated at Jamnagar over half acre of land where secondary process of dehydration like oven-drying, sorting, mincing, grinding, metal detection, pulverizing, and toasting is carried out with highest standard of quality.

At Oceanic Foods Limited, we desire to demonstrate its capability to provide various products conforming to needs of its customers. We aim satisfy the needs of customers including product requirements, the regulatory authorities and accreditation bodies and to achieve customer satisfaction by maintaining the best standards at all level from procurement to dispatch. Going forward, the adoption of food safety and quality assurance mechanisms such as Total Quality Management (TQM) including ISO 9000, ISO 22000, Hazard Analysis and Critical Control Points (HACCP), Good Manufacturing Practices (GMP) and Good Hygienic Practices (GHP) by the food processing industry offers several benefits. It would enable adherence to stringent quality and hygiene norms and thereby protect consumer health, prepare the industry to face global competition, enhance product acceptance by overseas buyers and keep the industry technologically abreast of international best practices.

Internal Control Systems and their adequacy:

There is an adequate internal control procedure commensurate with the size of the company and nature of the business for inventory, fixed assets and for the sale of goods or services. The Company has implemented proper and adequate systems of internal control to ensure that all assets are safeguarded and protected against loss from any unauthorized use or disposition and all transactions are authorized, recorded and reported correctly. The system ensures appropriate information flow to facilitate effective monitoring. The internal audit system also ensures formation and implementation of corporate policies for financial, reporting, accounting and information security. The Company has constituted Audit committee to overlook the internal control systems and their adequacy. Audit committee regularly reviews and gives recommendations on proper and adequate internal control systems.

Financial performance:

Sr. No. Particulars	For the year ended 31 March 2023	For the year ended 31 March 2022
Revenue
1 Revenue from Operations
a. Revenue from sale of products	8,569.79	11,978.47
b. Other Operating Income	323.16	402.52
2 Other Income	12.46	26.09
3 Total Income (I)	8,905.41	12,407.08
4 Expenses
a. Cost of Material Consumed	6,332.08	9,641.61
b. Purchase of Stock in Trade	-	-
c. Change in inventory of Finished Goods, Work-in- progress and Stock-in-Trade	(58.00)	(224.62)
d. Employee Benefits Expense	378.79	355.49
e. Finance Costs	64.14	185.82
f. Depreciation and Amortisation Expense	106.68	99.80
g. Product Development Expense	-	-
h. Other expenses	1,667.96	2,006.34
5 Total Expenses (II)	8,491.65	12,064.43
6 Profit before Exceptional Items	413.76	342.65
7 Exceptional Items
8 Profit/(Loss) before Tax (III)	413.76	342.65
9 Tax Expense: (IV)
a. Current Tax	110.76	85.71
b. Deferred Tax	1.42	(10.04)
10 Profit/(Loss) for the Year (III - IV= V)	301.58	266.97
11 Other Comprehensive Income (VI)
a. Items that will not be reclassified to profit or Loss
(i) Remeasurement of Post Employment Benefit Obligation	(0.60)	1.67
(ii) Income tax relating to remeasurement of Defined Benefit Obligation	0.03	(0.42)
b. Items that will be reclassified to profit or Loss
Total Other Comprehensive Income/ (Expense) for the Year (VI)	(0.57)	1.25
12 Total Comprehensive Income/ (Expense) for the Year (V + VI =VII)	301.01	268.22

During the Financial year 2022-2023, the Company has earned Net revenue from the operations including other income of Rs 8,905.41 Lakhs as compared to previous year revenue i.e Rs 12,407.08 Lakhs. Further, net profit (after tax) has been increased to Rs. 301.01 Lakhs as compared to previous year net profit of Rs 268.22 Lakhs.

Segments:

Oceanic Foods Limited does not have multiple segments. It has only one single segment and engaged in the business of processing and sales of dehydrated vegetables. Hence, comments on segments are not required.

Human Resources:

Oceanic recognizes the importance of its employees and the pride, passion and drive they possess to take the organization to the new heights we have at around 100 employees. Our Company provides its employees with numerous opportunities to increase their knowledge, skills and abilities and enable them to grow in their careers. Oceanic is proud of diverse mix of employees who work with an edge over others in the industry. Oceanic seeks to attract, retain and develop employees who are qualified and experienced with the right mix of technical and behavioral competencies that fulfill the targeted business requirements. We make sincere efforts to train our employees to become leaders of tomorrow. The Company successfully adds value to the employees talent through result driven training while encouraging and rewarding excellence.

Cautionary statements:

All statements made in Management and Discussion Analysis have been made in good faith. Many unforeseen factors may come into play and affect the actual results, which may be different from what the management envisages in terms of performance and outlook. Factors such as economic conditions affecting demand/supply and priced conditions in domestic & international markets in which the Company operates, and changes in Government regulations, tax laws, other statues and other incidental factors, may affect the final results and performance of the Company