sri vajra granites ltd Management discussions

INDIAN ECONOMY AND INDUSTRY STRUCTURE AND DEVELOPMENTS:

After recording the deepest GDP contraction among G20 economies in the second quarter of 2020, the Indian economy showed great resilience by growing positively in the last two quarters of FY21. The year 2020 saw unprecedented disruptions to lives and livelihood all across the world and India was no exception. India also emerged as the second most resilient economy after Germany in 2021 exhibiting a strong "economic resurgence" to the global economic turmoil caused by the COVID-19 pandemic.

As the nation continued its fight against the novel virus and wade through the pandemic induced challenges, the economy and the constituent industries had their fair share of learnings along the way. The impact of the pandemic and lockdown was disproportionately felt across industries. While industries such as hospitality and manufacturing were impacted immediately, the impact on the financial sector was felt with a lag, as is evident from the quarterly GDP numbers.

However, with the phased unlocking of the economic activities, easing of movement restrictions, pent-up and festive demand, and the revival of several infrastructure projects led to the slow recovery of the economy in the latter half of FY21. As anticipated, while the lockdown resulted in a 23.9% contraction in GDP in Q1, the recovery has been a V-shaped one as seen in the 7.5% decline in Q2 and then a steady recovery across all key economic indicators in the second half of FY21. According to the governments Economic Survey 2020-21, Indias GDP is expected to shrink by 7.7% in FY21. A robust sequential growth of 23.9% is expected in H2, FY21 over H1, FY21.

Some of the unique trends witnessed by economy during the pandemic ridden year was manufacturing sectors resilience, rural demand cushioning overall economic activity and structural consumption shifts in booming digital transactions. Agricultural sector emerged as a big saviour for the economy during the year and helped cushion the shock of the COVID-19 pandemic on the Indian economy in FY21 with a growth of 3.4%. A series of progressive reforms undertaken by the government have contributed towards nourishing the nations vibrant manufacturing and agricultural sector, which emerged as a silver lining to Indias growth story of FY21.

However, with the economic activity gaining momentum with the start of the phased unlocking of economic activities and rollout of coronavirus vaccines, the Indian economy is showing decisive signs of a V-shaped recovery in 2021 with the return of consumer confidence, robust financial markets, and an uptick in manufacturing and exports activities. According to some of the globally renowned forecasting agencies, the Indian economy is expected to clock a growth rate of 10.2% for the calendar year 2021, thanks to the receding COVID-19 risks with rising vaccination rate and favourable monetary policy from the government.

The growth in exports of natural stones from India like granite, marble, slate and quartzite slowed down in due to lack of policy support from state governments, according to industry players. Production is down and a lot of processing units have closed down

India has the second largest deposit of natural stones in the world with 15 per cent of the natural stone reserve, which is about 46.23 billion cubic metres. In view of above cirucumstances and the volatile input cost environment and heightened competitive intensity, the operating environment for your company continued to be challenging, there by company was forced to sell its whole of undertaking to clear Loan availed from Bank, Labour Dues and Statutory Payments.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has adequate systems of internal Controls commensurate with its size and operations to ensure orderly and efficient conduct of business. These controls ensure safeguarding of assets, reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely preparation of reliable financial information.

The Audit Committee reviews the adequacy and the effectiveness of the internal controls at periodic intervals to ensure that internal control systems are adhered to. Further, the Board annually reviews the effectiveness of the Companys internal control system.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Company was not operational during the financial year and Board of Directors of the company are waging different options to start operations in the company.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS FRONT:

Your Companys human resource management systems and processes are designed to enhance employee engagement, organizational capability and vitality so as to ensure that competitive superiority and capable of achieving your Companys ambitious plans for growth.