MANAGEMENT DISCUSSION & ANALYSIS REPORT
We submit herewith our Management Discussion & Analysis Report on the Companys
Business for the year ended 31st March, 2023. We have attempted to include on
all specified matters to the extent relevant or within limits that in our opinion are
imposed by the Companys competitive position.
OVERVIEW OF GLOBAL ECONOMY
The global economy was estimated to have grown at a slower pace 3.2% in 2022, compared
to 6% in 2021 (which was on a smaller base of 2020 on account of the pandemic effect). The
relatively slow global growth of 2022 was marked by the Russian invasion of Ukraine,
unprecedented inflation, pandemic-induced slowdown in China, higher interest rates, global
liquidity squeeze and quantitative tightening by the US Federal Reserve.
The challenges of 2022 translated into moderated spending, disrupted trade and
increased energy costs. Global inflation was 8.8% in 2022, among the highest in decades.
US consumer prices increased about 6.5% in 2022, the highest in four decades. The Federal
Reserve raised its benchmark interest rate to its highest in 15 years.
The global equities, bonds, and crypto assets reported an aggregated value drawdown of
USD26 trillion from peak, equivalent to 26% of the global gross domestic product (GDP). In
2022, there was a concurrently unique decline in bond and equity markets; 2022 was the
only year when the S&P 500 and 10-year US treasuries delivered negative returns of
more than 10%. Gross FDI inflows - equity, reinvested earnings and other capital -
declined 8.4% to $55.3 billion in April-December. The decline was even sharper in the case
of FDI inflows as equity - these fell 15% to $36.75 billion between April and December
2022. Global trade expanded by 2.7% in 2022 (expected to slow down to 1.7% in 2023).
The S&P GSCI (benchmark for commodity investments and a measure of global commodity
performance) fell from a peak of 4288 in June 2022 to 3233.4. There was a sharp decline in
crude oil, natural gas, coal, lithium, lumber, cobalt, nickel and urea realisations. Brent
crude oil dropped from a peak of around USD 120 per barrel in June 2022 to USD 80 per
barrel at the end of the calendar year following the enhanced availability of low-cost
Russian oil.
The global economy is projected to grow a weak 2.9% in 2023, marked by sustained
Russia-Ukraine conflict and higher interest rates. Global inflation is projected to be
6.5% in 2023 (Source: IMF). On the positive side, the reopening of Chinas economy after
the waning of the pandemic, the decline in the European energy crisis and robust US
consumption outlook (despite high inflation) remain positives. Interestingly, even as the
global economy is projected to grow less than 3% for five years, India and China are
likely to account for half the global growth in 2023 (IMF).
OVERVIEW OF INDIAN ECONOMY
Even as the global conflict remained geographically distant from India, ripples
comprised increased oil import bills, inflation, cautious government and a sluggish equity
market. India reported an estimated economic growth of 7.2% in FY 2022-23. India emerged
as the second fastest-growing G20 economy in FY 2022- 23. India had retained its position
as the fifth-largest global economy and was seen as a principal driver of the global
economy (with China).
According to the India Meteorological Department, the year 2022 delivered 6% higher
rainfall than the long period average. Indias wheat harvest was expected to rise to
around 107 million metric tons (MMT) in 2022-23 from 102 MMT in the preceding year. Rice
production at 122 million metric tons (MMT) was down 6 percent due to unseasonal rains.
Pulses acreage grew 5 percent to 154.80 lakh hectares following better monsoon rains. Due
to a renewed focus, the oilseed area increased by 7.31% from 102.36 lakh hectares in
2021-22 to 109.84 lakh hectares in 2022-23. Indias wheat production in crop year 2022-23
is expected to be 102.9 million tonnes (mt), less than the governments estimate of 112
mt.
Indias exports (merchandise and services) in April February 2022-23 were estimated to
have grown 16.18 percent over the same period of the previous year. As Indias domestic
demand remained steady amidst a global slowdown, imports in April-February 2022-23 were
estimated to have grown 19.93 percent over the corresponding period of the previous year.
Indias exports in FY2021 -22 were $676 billion and likely to achieve a record $750 bn in
FY23.
Till Q3, FY23, Indias current account deficit, an indicator of the countrys balance
of payments position, decreased to $18.2 billion, or 2.2% of GDP from $22.2 billion (2.7%
of GDP) a year ago. Indias fiscal deficit was estimated in nominal terms at ~ Rs 17.55
lakh crore and 6.4% of GDP for the year ending March 31,2023.
Indias headline foreign direct investment (FDI) numbers rose from US$74.01 billion in
2021 to a record $84.8 billion in 2021 -22, a 14% Y-o-Y increase due to 100% FDI approval
via automatic route in the Insurance sector, civil aviation, coal sector, telecom, pharma,
infrastructure. In 2022-23, the government was estimated to have addressed 77% of its
disinvestment target (Rs 50,000 crore against a target of H65,000 crore).
After three consecutive years of rise, Indias foreign exchange reserves declined by
around $ 70 billion in 2022 amid rising inflation and interest rates. The countrys forex
reserves, which stood at $606.47 billion on 1 April 2022, declined to $578.44 billion on
March 31,2023. Indias currency weakened from H 75.91 to a US dollar toH82.34 as on 31
March 2023 due to a stronger dollar and weaker current account deficit.
Inflation data on the wholesale Price Index (which calculates the overall prices of
goods before selling at retail prices) eased to 4.73% during the period. In 2022, CPI hit
its highest of 7.79% in April 2022; WPI reached its highest of 15.88% in May 2022.
In 2022-23, total receipts (other than borrowings) were estimated at 6.5% higher than
the Budget estimates. TaxGDP ratio was estimated to have improved by 11.1 percent Y-o-Y in
RE 2022-23.
The total gross collection for FY23 was Rs 18.10 lakh crore, an average of Rs 1.51 lakh
a month and up 22% from FY22, Indias monthly goods and services tax (GST) collections hit
the second highest ever in March 2023 to H1.6 lakh crore.
For 2022-23, the government collected Rs 16.61 lakh crore in direct taxes, according to
data from the Finance Ministry. This amount is 17.6 percent more than what was collected
in the previous fiscal.
Per capita income almost doubled in nine years to Rs 172,000 during the year under
review, a rise of 15.8 percent over the previous year. Indias GDP per capita was 2,320
USD (March 2023), close to the magic figure of $2500 when consumption spikes across
countries.
India moved up in the Ease of Doing Business rankings from 100th in 2017 to 63rd in
2022
According to the World Bank April 2024 projections, Indias GDP is projected to expand
by 6.3 percent In FY24, supported by domestic demand and increased public investment.
Indias retail inflation rate could decline from 6.6 percent to 5.2 percent in FY24. The
growth could also be driven by broad-based credit expansion, better capacity utilisation
and improving trade deficits. Headline and core inflation rates could trend down. Private
sector investments could revive.
COMPANY & INDUSTRY STRUCTURE
Indias construction industry is engaged in growth, which mainly includes real estate
and urban development projects. Given the nations objective to modernize infrastructure
and bring about a ‘smart development in its cities, India is expected to emerge as
the third largest construction market by 2025. Demands of Asbestos Cement Sheet market
have grown during the past couples of years because of the industrys efforts in making in
roads into rural markets. Demand of Asbestos Cement Pressure Pipes and Roofing sheets is
encouraging due to policies of various States Government. Our Company operates Asbestos
Cement Pressure Pipes and Roofing sheets under the brand name of JAI KIRTI. Asbestos
Cement Pressure Pipes are used for Portable Water Supply, Casing Pipes in Bore well,
Sewage, Irrigation and Roofing Sheet products are used as a roofing material for housing,
warehousing and industrial purpose.
OPERATIONS
A Summary of key indication is given below detailed financial performance may be viewed
from the Balance Sheet and schedules thereto in the Annual Report.
| Particulars |
|
2022-23 |
2021-22 |
| Production |
A.C Pressure Pipe (in MT) |
56947 |
42919 |
|
A.C roofing Sheet (in MT) |
150462 |
183198 |
| Sales |
A.C Pressure Pipe (in MT) |
55693 |
46569 |
|
A.C roofing Sheet (in MT) |
156250 |
175110 |
|
Gross Sales (Rs in Lacs) |
31329 |
28533 |
COMPANY REVIEW
Kanoria Energy & Infrastructure Limited located in Hamirgarh Bhilwara, Rajasthan.
The Company is engaged in manufacturing of Asbestos Cement Pressure Pipes Asbestos Cement
A.C. Corrugated Roofing Sheets and allied products. The Company is the largest
manufacturer of A.C. pipes in India supplying thousands of kilometers of pipes all over
India including many vital World Bank assisted water supply schemes. KIRTI Brand A.C.
pipes are manufactured at the most modern factory in Hamirgarh, Distt. Bhilwara
(Rajasthan) India.
The Company also has most modern and sophisticated automatic plant of latest technology
for manufacturing Asbestos Cement A.C. Corrugated Roofing Sheets and allied products. The
Asbestos Cement Corrugated Sheets are produced in the plant with the finest quality of raw
material and undergo stringent quality control measures at various stages during
manufacturing under constant supervision of highly experienced quality conscious
professionals.
The "JAI KIRTI" A.C. Cement Corrugated Sheets and allied products are safe,
durable and most economical for various applications. The products under the umbrella
brand of "JAI KIRTI" are intended to create a benchmark in the category of
Industrial and Housing roofing systems.
OPERATION REVIEW
The Company has recorded revenue from operations of Rs.31329.21 Lakh in the current
year against Rs.28532.63 Lakh in the previous year. The EBIDTA (Earnings before interest,
tax, depreciation and amortisation) is Rs.2008.72 Lakh in 202122 and Rs.2700.32 Lakh in
2022-23. The Company has reported a Profit after tax of Rs.954.68 Lakh as against
Rs.1239.20 Lakh (which includes exceptional income of Rs.696.67 Lakh) during previous
year. The Company is operating in single segment
i.e. Asbestos Cement pressure pipes and sheets.
ENVIRONMENT & SAFETY
We are conscious of the need of the environmentally clean and safe operations. Our
policy requires all operations to be conducted in way so as to ensure safety of all
concerned, compliance of statutory and industrial requirement for environment protection
and conservation of natural resources.
HUMAN RESOURES AND INDUSTRIAL RELATION
Management recognizes that employees represent our greatest assets and are strong
pillars of organization and it is only because of motivated, creative and committed
employees, We have achieved our aims. Hence, the Company attempts to take good care of
welfare and betterment of employees. The Company takes initiative like training and
development for its people to increase the performance. The Company has taken various
steps to improve and enhance skill of its people. The industrial relations remained
cordial in our plant. The total strength as at the end of the financial year 2022-23 was
440 employees.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has appropriate systems for Internal Control. The systems are improved and
modified continuously to meet with changes in business conditions, statutory and
accounting requirements.
The Company has strong Management Information System, which is an integral part of
control mechanism. The Audit Committee of Board of Directors reviews the efficiency and
effectiveness of internal control systems and suggests the solution to improve and
strengthen. The Internal control system were tested during the year and no material
weakness in design or operation were observed.
RISK AND CONCERNS
The Company believes that an effective, consistent and sustainable risk management
framework is essential part of the work culture. Risk management must be fully integrated
into the organisations governance policies. It is vital to identify, assess and act to
minimise various risks. Some of the key risks identified include:
Uncertainty about demand conditions given sluggish global economic recovery and its
likely contagion effects, regulatory issues regarding environment clearance and land
acquisitions as well as sector specific issues like high cost of capital have stagnated
the growth in the economy of our country.
CAUTIONARY STATEMENT
Statement in this Management Discussion and Analysis describing the Companys
objectives, projections, estimates, expectations or predictions may be
"forward-looking statements" 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 raw
material availability and prices, cyclical demand and pricing in the Companys principal
markets, changes in Government regulations, tax regimes, economic developments within
India and the countries in which the Company conducts business and other incidental
factors.
|
FOR AND ON THE BEHALF OF BOARD OF DIRECTORS |
|
Sd/- |
Sd/- |
| Place: New Delhi |
Sanjay Kumar Kanoria |
Rajiv Lall Adya |
| Date: 11th August, 2023 |
Managing Director |
Director |
|
DIN: 00067203 |
DIN:06915169 |
+91-9892691696
