INDIAN INDUSTRY AND DEVELOPMENTS
The Indian economy was negatively impacted by an unprecedented health crisis in 2020-21
with the highly contagious corona virus (Covid-19) spreading across the country. In
response to the pandemic, Government has taken several proactive preventive and mitigating
measures starting with progressive tightening of international travel, issue of advisories
for the members of the public, setting up quarantine facilities, contact tracing of
persons infected by the virus and various social distancing measures. Government imposed a
strict 21 days nationwide lockdown from 25th March, 2020, under the Disaster Management
Act, 2005, with subsequent extensions and relaxations, to contain the spread of Covid-19
while ramping up the health infrastructure in the country. The lockdown measures, imposed
to contain the spread of Covid-19 pandemic in India, ubiquitously affected employment,
business, trade, manufacturing, and services activities. The real Gross Domestic Product
(GDP) growth is projected to contract by 7.7 percent in 2020-21 as compared to a growth of
4.2 percent in 2019-20. GDP growth, however, is expected to rebound strongly in 2021-22
owing to the reform measures undertaken by the Government.
The Government announced a special economic and comprehensive package under Atmanirbhar
Bharat of Rs. 20 lakh crore - equivalent to 10 percent of Indias GDP to fight the
Covid-19 pandemic in India. Several structural reforms announced as part of the package,
inter alia, include deregulation of the agricultural sector, change in definition of
MSMEs, new PSU policy, commercialization of coal mining, higher FDI limits in defence and
space sector, development of Industrial Land/ Land Bank and Industrial Information System,
Production Linked Incentive Schemes, revamp of Viability Gap Funding scheme for social
infrastructure, new power tariff policy and incentivizing States to undertake sector
reforms. Apart from this, various steps were taken to boost consumption which, inter alia,
includes cash payment in lieu of the Leave Travel Concessions (LTC) scheme, One-time
special Festival advance of 10,000 (interest-free) for central Government employees.
Other steps such as Interest-free 50- year loan to states, additional capital expenditure
budget for the central Government, launch of Emergency Credit Line Guarantee Scheme
(ECLGS) 2.0, 1.46 lakh crore boost for manufacturing through Production-linked
incentives for ten Champion Sectors, 18,000 crores additional outlay for PM Awaas Yojana
(PMAY) Urban, Equity infusion in National Investment and Infrastructure Fund (NIIF) Debt
Platform, Demand booster for Residential Real Estate Income Tax relief for Developers
& Home Buyers, Boost for Project Exports, Capital and Industrial Stimulus has been
initiated to support economic growth.
As per the first Advance Estimates of annual national income released by the National
Statistical Office (NSO), Real GDP is estimated to contract by 7.7 percent in 2 2020-21,
as compared to a growth of 4.2 percent in 2019-20. This contraction in GDP growth is
mainly attributed to the contraction in industry and services sector. The growth of Gross
Value Added (GVA) at constant (2011-12) basic prices is estimated to contract by 7.2
percent in 2020-21, as compared to a growth of 3.9 percent achieved in 2019- 20. Positive
growth in real GVA in agriculture & allied sectors at 3.4 percent in 2020- 21 against
4.0 percent in PE of 2019-20 indicates resilience of rural economic activity to the
Covid-19 pandemic. From the demand side, private consumption expenditure is estimated to
contract at 9.5 percent in 2020-21 as against a growth of 5.3 percent in 2019-20 and fixed
investment is estimated to decline by 14.5 percent in 2020-21 as against 2.8 percent in
2019-20. Government consumption final expenditure is estimated to grow at 5.8 percent in
2020-21 as against 11.8 percent in 2019-20. Exports and imports of goods and services are
estimated to contract at 8.3 percent and 20.5 percent (at constant prices) respectively in
2020-21.
INDUSTRY OVERVIEW
1. Iron and Steel Industry
India was the worlds second-largest steel producer in 2019. India surpassed Japan to
become the worlds second-largest steel producer in 2019, with crude steel production of
111.2 million tonnes (MT). In India, as per Indian Steel Association (ISA), steel demand
is estimated to grow 7% in FY20 and FY21.
In FY20, crude steel production and finished steel production in India was 108.5 MT and
101.03 MT, respectively.
Between April 2020 and February 2021, Indias cumulative production of finished steel
stood at 85.60 MT while the cumulative production of crude steel stood at 92.78 MT.
Steel companies are looking to restart expansion projects on the back of burgeoning
steel processes with a capacity addition of 29 MT. In April 2021, Indias finished steel
consumption stood at 6.78 MT.
Also, during the period April 2020 to February 2021 the crude steel production stood at
In November 2020, the Steel Authority of India Limited (SAIL) reported 7% YoY growth in
crude steel production.
Export and import of finished steel stood at 8.42 MT and 6.69 MT, respectively, in
FY20.
Export and import of finished steel stood at 9.49 MT and 4.25 MT, respectively, between
April 2020 and February 2021. In April 2021, Indias export rose by 196% over 2020 and
17% over 2019.
Indias per capita consumption of steel grew at a CAGR of 4.43% from 46 kgs in FY08 to
74.10 kgs in FY19.
Government has taken various steps to boost the sector including the introduction of
National Steel Policy 2017 and allowing 100% Foreign Direct Investment (FDI) in the steel
sector under the automatic route. According to the data released by Department for
Promotion of Industry and Internal Trade (DPIIT), Indian metallurgical industries
attracted Foreign Direct Investment (FDI) to the tune of US$ 14.24 billion between April
2000 and September 2020.
The Governments National Steel Policy 2017 aims to increase the per capita steel
consumption to 160 kgs by 2030-31. The Government has also promoted policy which provides
a minimum value addition of 15% in notified steel products covered under preferential
procurement.
In 2019, the Government introduced Steel Scrap Recycling Policy with an aim to reduce
import.
The industry is also benefitting from the developments happening across various
industries. The new Vehicle Scrappage policy will help in reducing the steel prices since
the policy enables recycling the materials used in old vehicles. In the healthcare front,
major steel producers are now exceeding their production capacities to produce oxygen
cylinders for COVID patients. In 2021, Indian Railways is planning to procure over 11 lakh
tons of steel from Steel Authority of India Limited (SAIL) for the track renewal and
laying new lines across the country.
In January 2021, the Ministry of Steel, Government of India, signed a Memorandum of
Cooperation (MoC) with the Ministry of Economy, Trade and Industry, Government of Japan,
to boost the steel sector through joint activities under the framework of India Japan
Steel Dialogue.
Under the Union Budget 2020-21, the government allocated Rs. 39.25 crore (US$ 5.4
million) to the Ministry of Steel
(Source: https://www.ibef.org/industry/steel-presentation)
2. Textile Industry
The textiles and apparel industry can be broadly divided into two segments - yarn and
fibre and processed fabrics and apparel. The domestic textiles and apparel market was
estimated at US$ 100 billion in FY19. The textile industry has around 4.5 crore workers
including 35.22 lakh handloom workers all over the country. In FY19, growth in private
consumption was expected to create strong domestic demand for textiles. Growth in demand
is expected to continue at 12% CAGR to reach US$ 220 billion by 2025-26.
Cotton production in India reached 35.4 million bales in FY20*. During FY19, production
of fibre in India stood at 1.44 million tonnes (MT) and reached 1.60 MT in FY20 (till
January 2020), while that for yarn, the production stood at 4,762 million kgs during same
period. The total raw silk production increased by 1% (35,820 MT) in FY20 over the
previous year FY19 (35,468 MT) despite COVID-19.
India is the worlds second largest exporter of textiles and clothing. Increased
penetration of organised retail, favourable demographics, and rising income level are
likely to drive demand for textiles. Cloth production stood at 63.34 billion square meters
in FY20 (till January 2020).
Exports of textiles (RMG of all textiles, cotton yarn/fabs./made-ups/handloom products,
man-made yarn/fabs./made-ups, handicrafts excl. handmade carpets, carpets and jute mfg.
including floor coverings) stood at US$ 29.45 billion, as of March 2021.
The Indian textile and apparel industry is expected to grow to US$ 190 billion by FY26.
The share of the Indias textiles and apparel exports in mercantile shipments was 11%
in
2019-20.
Indian apparel market is expected to reach US$ 85 billion by 2021.
India is working on major initiatives, to boost its technical textile industry. Owing
to the pandemic, the demand for technical textiles in the form of PPE suits and equipment
is on rise. Government is supporting the sector through funding and machinery sponsoring.
Top players in the sector are attaining sustainability in their products by
manufacturing textiles that use natural recyclable materials.
Rising Government focus and favourable policies is leading to growth in the textiles
and clothing industry. The Ministry of Textiles is encouraging investment through
increasing focus on schemes such as Technology Up-gradation Fund Scheme (TUFS). In Union
Budget 2020-21, the Government has allocated Rs. 761.90 crore (US$ 109.01 million) for
Amended Technology Upgradation Fund Scheme (A-TUFS). The Cabinet Committee on Economic
Affairs (CCEA), Government of India has approved a new skill development scheme named
Scheme for Capacity Building in Textile Sector (SCBTS). The Government announced a
special package to boost export by US$ 31 billion, create one crore job opportunities and
attract investment worth Rs. 80,000 crore (US$ 11.93 billion) during 2018-2020. Cumulative
FDI (Foreign Direct Investment) inflow in the textiles sector stood at over US$ 3.46
billion between April 2000 to September 2020.
In Union Budget 2020-21, the Government of India has allocated around Rs. 3,515 crore
(US$ 502.93 million) to the Ministry of Textiles and Rs. 80 crore (US$ 11.45 million) for
the scheme on Integrated Textile Parks. The Ministry of Textiles has announced Rs. 690
crore (US$ 106.58 million) for setting up 21 readymade garment manufacturing units in
seven states for development and modernisation of Indian textile sector. National
Technical Textiles Mission is proposed for a period from 2020-21 to 2023-24 at an
estimated outlay of Rs. 1,480 crore (US$ 211.76 million).
Under the production linked incentive scheme, government has approved Rs. 10,683 crore
(US$ 1.44 billion) for manmade fibre and technical textiles manufacturing.
The National Handloom Development Programme has been allocated Rs. 388.21 crore (US$
55.55 million), whereas, the Integrated Processing Development Scheme has received Rs. 50
crore (US$ 7.15 million) in Union Budget 2020-21.
In March 2021, Minister of Textiles Smriti Irani announced that India will be fully
self-reliant in silk production in the next two years.
To support the handloom weavers/weaver entrepreneurs, the Weaver MUDRA Scheme was
launched to provide margin money assistance at 20% of the loan amount subject to a maximum
of Rs. 10,000 (US$ 134.22) per weaver. The loan is provided at an interest rate of 6% with
credit guarantee of three years.
In April 2021, Union Minister Smriti Irani has assured strong support from the Textile
Ministry to reduce industrys dependence on imported machine tools by partnering with
engineering organisations for machinery production. She also stated that the PLI scheme
for the textile industry is almost ready. The scheme aims to develop Man Made Fiber (MMF)
apparel and technical textiles industry by providing incentive from 3-15% on stipulated
incremental turnover for five years.
In March 2021, Natco Pharma announced its expansion into pheromone-based technology in
order to provide Indian farmers with an integrated pest control solution. The company is
planning to introduce its first green-label pheromone product to control ‘pink
bollworm in cotton fields. For the pheromone-based mating disruption technology, its Crop
Health Science (CHS) division will collaborate with ATGC Biotech Pvt. Ltd. (ATGC).
In March 2021, the state-run Odisha Industrial Infrastructure Development Corporation
(IDCO) and Indian Oil Corporation Limited (IOCL) signed an MoU to establish a plastic park
in Paradip, Odisha.
In January 2021, the Indian Texpreneurs Federation (ITF) suggested a six-pronged
strategy to achieve double-digit growth in the textiles and apparel sector. ITF published
the strategy under the theme ‘2021-A year of progress for Indian Textile &
Apparel Sector.
In January 2021, the Indo Tibetan Border Police (ITBP) signed an MoU with Khadi and
Village Industries Commission (KVIC) for supplying 1.72 lakh cotton khadi durries every
year for the Central Armed Police Forces (CAPF).
(Source: https://www.ibef.org/industry/indian-textiles-and-apparel-industry
analysis-presentation)
3. Agriculture and Allied Industries
India has the second-largest arable land resources in the world. With 20 agri-climatic
regions, all the 15 major climates in the world exist in India. The country also has 46 of
the 60 soil types in the world. India is the largest producer of spices, pulses, milk,
tea, cashew, and jute, and the second largest producer of wheat, rice, fruits and
vegetables, sugarcane, cotton, and oilseeds. Further, India is second in the global
production of fruits and vegetables and is the largest producer of mango and banana.
During 2019-20 crop year, food grain production reached a record of 296.65 million tonnes.
In 2020-21, Government of India is targeting food grain production of 298 MT. Consumer
spending in India will return to growth in 2021 post the pandemic-led contraction,
expanding by as much as 6.6%.
Total area sown with rabi crops was 34.8 million hectares by November 27, 2020, 4% more
than the previous season, and 2% above the average of the last five years. According to
the Ministry of Agriculture, 44% of wheat and other rabi crops were harvested out of a
total of 97 lakh hectares sown area in the 2020-21 rabi season. A total of 50.90 lakh
hectares of kharif crops will be sown in the kharif season of 2021-22.
Production of horticulture crops in India reached a record 326.6 million metric tonnes
(MMT) in 2020-21 (an increase of 5.81 million metric tonnes over FY20. The production of
fruits, flowers, spices and honey is expected to rise. India has the largest livestock
population of around 535.78 million, which translates to around 31% of the world
population. Milk production in the country is expected to increase to 208 MT in FY21 from
198 MT in FY20, registering a growth of 10% y-o-y.
India can be among the top five exporters of agro-commodities by shifting its focus on
cultivation and effectively handholding farmers, according to the World Trade Centre. The
total agricultural exports stood at US$ 37.31 billion between April 2020 and February
2021. The principal commodities that posted significant positive growth in exports between
FY20 and FY21 were the following:
Wheat and Other Cereals: 727% from Rs. 3,708 crore (US$ 505 million) to Rs. 5,860 crore
(US$ 799 million) Non-Basmati Rice: 132% from Rs. 13,130 crore (US$ 1,789) to Rs. 30,277
crore (US$ 4,126 million) Soya Meal: 132% from Rs. 3,087 crore (US$ 421 million) to Rs.
7,224 crore (US$ 984 million) Raw Cotton: 68% from Rs. 6,771 crore (US$ 923 million) to
Rs. 11,373 crore (US$ 1,550 million)
Sugar: 39.6% from Rs. 12,226 crore (US$ 1,666 million) to Rs. 17,072 crore (US$ 2,327
million) Spices: 11.5% from Rs. 23,562 crore (US$ 3,211 million) to Rs. 26,257 crore (US$
3,578 million)
The Agriculture Export Policy, 2018 aimed to increase Indias agricultural export to
Rs.
4,19,340 crore (US$ 60 billion) by 2022. Government aims to raise fishery export from
India to Rs. 1 lakh crore (US$ 14.31 billion) by 2024-25.
According to Department for Promotion of Industry and Internal Trade (DPIIT), Indian
food processing industry attracted Foreign Direct Investment (FDI) equity inflow of about
US$ 10.24 billion between April 2000 and December 2020.
Gross Value Added by agriculture, forestry, and fishing was estimated at Rs. 19.48 lakh
crore (US$ 276.37 billion) in FY20. Share of agriculture and allied sectors in gross value
added (GVA) of India at current prices stood at 17.8 % in FY20.
In November 2020, the agricultural ministry inaugurated the cooperative ‘Nafed
programme to help in setting up "Honey Farmer Producers Organisations" for
beekeepers in West Bengal, Bihar, Madhya Pradesh, Uttar Pradesh, and Rajasthan.
The Electronic National Agriculture Market (e-NAM), launched in April 2016 to create a
unified national market for agricultural commodities by networking existing Agriculture
Produce Marketing Committees (APMCs), had 16.6 million farmers and 131,000 traders
registered on its platform until May 2020. As per the Union Budget 2021-22, government
announced that through e-NAM (National Agriculture Market), ~1.68 crore farmers were
registered and trade worth Rs. 1.14 lakh crore (US$ 15.63 billion) was carried out; 1,000
more mandis will be integrated to achieve transparency and bring competitiveness.
The Government of India has introduced several projects to assist the agriculture
sector. Pradhan Mantri Gram Sinchai Yojana (PMGSY) aims to irrigate the field of every
farmer and improve water use efficiency to achieve the motto, Per Drop More Crop.
Overall, the scheme ensures improved access to irrigation. As per the Union Budget
2021-22, Rs. 11,588 crore (US$ 1.5 billion) was allocated to Pradhan Mantri Krishi Sinchai
Yojana (PMKSY). As per the Union Budget 2021-22, Rs. 1.33 lakh crore (US$ 18.41 billion)
was allocated to the Ministry of Agriculture. The Indian Prime Minister launched the
Pradhan Mantri Kisan Samman Nidhi Yojana (PM-Kisan) and transferred Rs. 18,000 crore (US$
2.45 billion) to bank accounts of >90 million beneficiaries on December 25, 2020. As
per the Union Budget 2021-22, Rs. 65,000 crore (US$ 8.9 billion) was allocated to Pradhan
Mantri Kisan Samman Nidhi (PM-Kisan). As per the Union Budget 2021-22, Rs. 8,514 crore
(US$ 1.17 billion) was allocated to the Department of Agricultural Research and Education.
In April 2021, the Government of India approved a PLI scheme for the food processing
sector with an incentive outlay of Rs 10,900 crore (US$ 1,484 million) over a period of
six years starting from FY22.
In November 2020, Netafim India, a leading smart irrigation solutions provider,
launched FlexNet, a revolutionary mainline and sub-mainline piping for above and
below-ground drip irrigation systems for Indian farmers.
In September 2020, the government launched the PM Matsya Sampada Yojana, e-Gopala App
and several initiatives in fisheries production, dairy, animal husbandry and agriculture.
Under this scheme, an investment of Rs. 20,000 crore (US$ 2.7 billion) will be made in the
next 4-5 years in 21 states.
In June 2020, Government introduced Pradhan Mantri Formalization of Micro Food
Processing Enterprises (PM-FME) scheme. It is expected to generate total investment of Rs.
35,000 crore (US$ 4.97 billion), generate 9 lakh skilled and semi-skilled employment, and
benefit 8 lakh units through access to information, training, better exposure, and
formalization.
In May 2020, the Government announced the launch of animal husbandry infrastructure
development fund of Rs. 15,000 crore (US$ 2.13 billion).
(Source: https://www.ibef.org/industry/agriculture-presentation)
COMPANY OPERATIONS
The Company initially was engaged in the business of imports and exports since 1991 for
a period of 19 years but due to the change in management in the Year 2010 it discontinued
the import export business and thereafter commenced business of trading in commodities.
The Company again underwent a further Change in Management in the Year 2013 after which
the company continued the business of trading of commodities but also undertook trading in
all types of natural resources, precious metals, textiles and agricultural products on
spot basis and from financial year 2014-15 it also entered into Trading of Rice and
Pulses.
OUR COMPETITIVE STRENGTHS
Experienced management team and a motivated and efficient work force
Our Company is managed by a team of experienced and professional personnel having
knowledge of all aspects of marketing, finance and broking. The faith of the management is
in the staff and their performance has enabled us to build up capabilities to expand our
business.
SWOT Analysis
Strengths
? Experienced Promoters and management team ? Domain knowledge in dealing in pulses ?
Low cost of processing orders and procurement
Weaknesses
? Dependence upon Specific Commodities.
? Dependence upon few suppliers and customers for business
Opportunities
? Potential to introduce new commodities and concentrate on higher value addition ?
Exiting a particular segment and entering a new segment easier. ? Venturing into Fruits
segment
Threats
? Commodities are prone to risk changes in natural environment. ? Industry is prone to
change in government policies
? There are no entry barriers in our industry which puts us to the threat of
competition from new entrants
? Companys Products and Platforms:
The company can carry on the business of buying, selling and trading in all kind of
commodities. Company has expertise in Trading in specific commodities such as bullion
(gold, silver), energy (crude oil, natural gas), metals, food grains (rice, maize),
spices, oil and oil seeds and others. The Subsidiary of the Company offers broking
facilities for dealing through the Commodity Exchange of MCX through its membership in
MCX.
The Company has entered into the Futures Trading in Commodities since it has opened up
spectacular growth opportunities and advantages not only for large cross section of market
participants like: producers, processors, traders, corporate, trading centers, importers,
exporters, co-operatives, industry associations but for investors community too.
The Company affords us a very dynamic field for diversified investment & trading
opportunities in addition to equity markets to the investors.
The Company is in a position to offer comprehensive and prompt service of advising from
its expertise and deal in the commodities market through its subsidiary M/s. Advantage
Commodities Private Limited, Mumbai which is a TCM (Trading cum Clearing member) of MCX
under the Company is entitled to trade on its own accounts as well as on account of its
clients.
The company can carry on the business of buying, selling and trading in all kind of
commodities.
The Company has a diversified client base that includes HNIs, retail customers,
corporate clients and other.
? FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONALPERFORMANCE
The total operating income of the company for the year under review is Nil as compared
to previous years operating income of Rs. 10.40 lakhs /- signifying a drop of 100%
in the Turnover. The chief reason for this is the drop-in margin on Steel Products and
Fabrics due to which Your Company stopped Trading on these commodities. Your Company
further continued its trading on Rice and Pulses.
The companys profit after tax in value terms went up to Rs. 24.83 Lakhs/- during
the year as compared to Rs. -75.81 Lakhs/- during previous financial year. The Net
Profit ratio is 33.64% in the current financial year 2020-2021 as compared to - 86.06% is
previous financial year 2019-20.
The financial performance of the company is as follows:
| Particulars |
As on March 31, 2021 |
As on March 31, 2020 |
| Revenue from Operation |
- |
10.40 |
| Purchases |
- |
- |
| NP Ratio |
33.64 |
-86.05% |
| Other Income |
73.82 |
77.68 |
| Finance Cost |
-13.45 |
10.26 |
| Employee benefit expenses |
-11.92 |
35.91 |
| Net profit before tax |
40.60 |
-75.80 |
| Net profit after tax |
24.83 |
-75.81 |
Financial Position
|
Standalone |
|
Consolidated |
|
| Particulars |
31st March 2021 |
31st March 2020 |
31st March 2021 |
31st March 2020 |
| Equity share capital |
1139.00 |
1139.00 |
1139.00 |
1139.00 |
| Reserves and surplus |
126.05 |
101.22 |
79.94 |
79.94 |
| Gross block (property, plant and equipment including intangible assets) |
26.82 |
26.65 |
48.80 |
48.80 |
| Total investments |
747.55 |
721.49 |
738.70 |
738.70 |
| Net current assets |
597.68 |
570.60 |
590.87 |
590.87 |
| Earnings per share in EPS: |
|
|
|
|
| Basic earnings (loss) per share from continuing and discontinued operations: |
-- |
-- |
-- |
-- |
| Diluted earnings (loss) per share from continuing and discontinued operations: |
-- |
-- |
-- |
-- |
The Profitability of the different commodities and other income year-wise are as
follows:
|
|
|
2020-2021 |
|
|
|
|
Garment |
Pulses |
Rice |
S S Pipes |
Others |
Total |
| Income |
0 |
|
|
|
|
|
| Expense |
0 |
|
|
|
|
|
| Net |
0 |
|
|
|
|
|
| % |
0 |
|
|
|
|
|
| Other Exp |
0 |
|
|
|
|
|
| Net Profit |
|
|
|
|
|
|
| Before Tax and Exceptional Items |
0 |
|
|
|
|
|
|
0% |
|
|
|
|
|
|
|
|
2019-20 |
|
|
|
|
Garment |
Pulses |
Rice |
S S Pipes |
Others |
Total |
| Income |
0 |
|
|
|
|
|
| Expense |
0 |
|
|
|
|
|
| Net |
0 |
|
|
|
|
|
| % |
0% |
|
|
|
|
|
| Other Exp |
0 |
|
|
|
|
|
| Net Profit |
|
|
|
|
|
|
| Before Tax and Exceptional |
|
|
|
|
|
|
| Items |
0 |
|
|
|
|
|
The above table reveals the performance of different commodities during the current and
the previous year.
As far as the Other income by way of Interest Income is concerned the Company has
earned an amount of Rs. 73.82 Lakhs in the current year as compared to Rs. 77.68 Lakhs in
the previous year showing decrease of 4.97% of the previous year.
ADEQUACY OF INTERNAL CONTROL SYSTEM
The Company has adequate internal control systems for the business processes in respect
of all operations, financial reporting, compliance with laws and regulations etc. Internal
Control Systems have been designed to provide reasonable assurance that assets are
safeguarded and, transactions are executed in accordances with managements authorization
and properly recorded and accounting records are adequate for preparation of financial
statements and other financial information. Regular internal audits ensure that
responsibilities are executed effectively. The Audit Committee reviews the adequacy of
internal controls on regular basis. Internal check is conducted on a periodical basis to
ascertain the adequacy and effectiveness of internal control systems. It has aligned its
current systems of internal financial control with the requirement of Companies Act, 2013.
It is intended to increase transparency and accountability in an organizations process of
designing and implementing a system of internal control.
Its internal control commensurate with its size and the nature of its operations.
These have been designed to provide reasonable assurance with regard to recording and
providing reliable financial and operational information, complying with applicable
statutes, safeguarding assets from unauthorized use, executing transactions with
properauthorisation and ensuring compliance of corporate policies.
The company has a well-defined delegation of power with authority limits for approving
revenue as well as expenditure. Processes for formulating and reviewing annual and long
term business plans have been laid down.
Our management assessed the effectiveness of the Companys internal control over
financial reporting (as defined in Clause 17 of SEBI Regulations 2015) as of March 31,
2021.
V. R. BHABHRA & Co., the statutory auditors of Agrimony Commodities Limited has
audited the financial statements included in this annual report and has issued an
attestation report on our internal control over financial reporting (as defined in section
143 of Companies Act 2013).
Based on its evaluation (as defined in section 177 of Companies Act 2013 and Clause 18
of SEBI Regulations 2015), our audit committee has concluded that, as of March 31, 2021,
our internal financial controls were adequate and operating effectively.
RISK MANAGEMENT
The Board of Directors has identified various elements of risks which in its opinion
may threaten the existence of the Company and have formulated measures to contain and
mitigate risks. The Company has adequate internal control systems and procedures to combat
identified risks. The audit committee periodically reviews the risks which may potentially
affect the companys operations or performance.
Listed below are our key risks with its anticipated impact on the company and
mitigation plans.
| Key Risks |
Impact on the Company |
Mitigation |
| Business model changes |
Rapidly evolving technologies are changing technology consumption patterns, creating
new classes of buyers within the enterprise, giving rise to entirely new business models
and therefore new kinds of competitors. This is resulting in increased demands on the
Companys agility to keep pace with the changing customer expectations. Failure to cope
may result may result in loss of market share and impact business growth. |
Focus on Research and Innovation efforts leveraging in house expertise, alliance
partnerships, and strong connections in the academic start-up ecosystem, and launching
multiple new services Strong customer-centricity which results in organization structures
(and reorganizations) that are always aligned to customer needs |
| Litigation risks |
Given the scale and geographic spread of the companys operations, litigation risks
can arise from commercial disputes and employment related matters. Our rising profile and
scale also makes us a target to litigations without any legal merit. In addition to
incurring legal costs and distracting management, litigations garner negative media
attention and pose reputation risk. Adverse rulings can result in substantive damages. |
Internal processes and controls adequately ensure compliance with contractual
obligations and also that potential disputes are promptly brought to the attention of
management and dealt with appropriately |
|
|
The company has at aim of in-house counsels in all major geographies it operates in.
There is a robust mechanism to track and respond to notices as well as defend the
Companys position in all claims and litigation |
| Currency volatility |
Volatility in currency exchange movements results in transaction and translation
exposure. Its functional currency is the Indian Rupee. Appreciation of the Rupee against
any major currency could impact the reported revenue in Rupee terms, the profitability and
also result in collection losses. |
It follows a currency hedging policy that is aligned with market best practices, to
limit impact of exchange volatility on receivables and earnings Hedging strategy is
monitored by the Risk Management Committee on a regular basis |
| Cyber Attacks |
Risks of cyber attacks are forever a threat on account of the fast evolving nature of
the threat. In addition to impact on business operations, a security breach could result
in reputational damage, penalties and legal and financial liabilities |
Investments in automated prevention and detection solutions Continued reinforcement of
stringent security policies & procedures Collaboration with Computer Emergency
Response Team (CERT) and other private Cyber Intelligence agencies, and enhanced awareness
of emerging cyber threats Enterprise-wide training and awareness programs on Information
Security Periodic rigorous testing to validate effectiveness of controls through
Vulnerability Assessment and Penetration Testing Internal and external audits |
HUMAN RESOURCE DEVELOPMENT
The Employee Relations with the Management continued to be cordial. The Company regards
its employees as a great asset and accords high priority to training and development of
its employees. The Company recognizes that its human resource is its strength in realizing
its goals and objectives.
CAUTIONARY STATEMENT
This report contains forward-looking statements extracted from reports of Government
Authorities / Bodies, Industry Associations etc. available on the public domain which may
involve risks and uncertainties including, but not limited to, economic conditions,
government policies, dependence on certain businesses and other factors. Actual results,
performance or achievements could differ materially from those expressed or implied in
such forward-looking statements. This report should be read in conjunction with the
financial statements included herein and the notes thereto. The Company does not undertake
to update these statements.
| By Order of the Board of Directors |
| For Agrimony Commodities Limited |
| Sd/- |
| Anandrao Gole |
| Chairman & Managing Director |
| DIN: 06668955 |
| Place: Mumbai |
| Date: September 09, 2021 |
+91-9892691696
