alkali metals ltd Management discussions

The Management Discussion and Analysis Report sets out developments in the business, environment and companys performance since our last report. The analysis supplements the Directors Report and Audited Financial Statements which together form part of this Annual Report.

ECONOMY REVIEW

As per studies, Indian Speciality Chemical Industry is likely to see a robust growth in the coming years. The Indian specialty chemicals industry has expanded exponentially in recent years. It represents 22 per cent of Indias overall chemicals and petrochemicals market and is valued at USD 32 billion. The Industry was expected to grow on predicted lines. Apart from the usual agro chemicals industry, the dyes and pigments, cosmetics and personal care industry was expected to grow. However, the recessionary conditions in Europe and geo political scenario have contributed to high raw material and logistics cost thereby slowing down the demand. The global supply chain was once again affected and this continued to have an effect. The domestic market too has seen sluggish demand. The recent opening of Chinese Markets offers hope that the current situation improves. It is estimated that the speciality chemical section will be primarily export-oriented and play a significant role in the overall macroeconomics. The Government is focussing on giving export benefits, tax advantages, and capital subsidies to add thrust to the ongoing growth.

OUTLOOK

India is expected to account for more than 20% of incremental global consumption of chemicals over the next two decades. The Indian Chemical Industry has been modernizing through new molecules, innovations in technology, product profile, and quality to emerge as a modern World class Chemical industry ready to take on global competition. The Company hopes to understand the demand and develop new products through continuous R&D.

POTENTIAL PITFALLS

• Recessionary/Inflationary effects in many countries resulting in global slowdown

• Geo political situation across the European Countries and moderate growth in key export markets due to sanctions imposed therein

• Stiff price competition resulting in difficulty in maintaining margin

• Weak domestic demand PRODUCT PERFORMANCE

All the products have performed in similar manner as compared to the previous year. The Company has sold 726 MT of finished products during 2022-23 and realized a turnover 8, 639 Lakhs. The Company sold sodium derivatives, pyridine derivatives and fine chemicals. The Company plans to continue its effort in developing new products.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The company has in place effective systems of internal control commensurate to its size and nature of business which provides for:

• Efficient use and safeguarding resources

• Accurate recording and custody of assets

• Compliance with prevalent statutes, policies, procedures, listing requirements, management guidelines and circulars.

• Transactions being accurately recorded ,cross verified and promptly reported

• Adherence to applicable accounting standards and policies.

• IT systems which include controls for facilitating the above.

The internal control system provides for well documented policies, guidelines, authorizations and approval procedures. Also, the internal audit reports are laid before Audit Committee and discussions were held periodically by the Audit Committee at its meetings. The observations / findings made in internal audit reports, along with the status of action thereon are reviewed by the Audit committee of the Board of directors on a regular basis. The company has an exhaustive budgetary control system and the management regularly reviews actual performance

OPERATIONAL PERFORMANCE

• The Company made a comprehensive profit of 287.59 lakhs

• The Company made a profit before tax and exceptional items of 386.06 lakhs

• The book value per share stands at 51.16/- as on 31.03.2023 ( 50.33 previous year).

• The exports contributed to 65% of the total turnover

• Net foreign exchange earnings of 4,516.81 Lakhs HUMAN RESOURCE DEVELOPMENT

The management believes that competent and committed human resources are important to attain success in the organisation. The Company believes in creating a pool of talent within its people whose skills, expertise and experience provide the impetus towards market leadership. The Companys human resource practices are widely accepted by the management, staff and workers. During the year under review, the Industrial relations with Employees/ workers at all the Companys locations continued to be harmonious and positive.

CAUTIONARY AND FORWARD LOOKING STATEMENT

Statements in the Management Discussion and Analysis Report which describe the Companys objectives, projections, estimates, expectations or predictions may be considered to be "forward - looking statements" within the meaning of applicable Securities Laws and Regulations. These statements are based on certain assumptions and expectations of future events. Actual results could however materially differ from those expressed or implied. Important factors that could make a difference to the Companys Operations include global and Indian political scenario, economic & demand-supply conditions, finished goods prices, raw materials cost & availability, cyclical demand and pricing in the companys principal markets, changes in Government regulations, Policies, tax regimes, economic developments within India besides other factors such as litigation and industrial relations as well as the ability to implement the strategies.

For and on behalf of Board of Directors For Alkali Metals Limited

	Dr. J.S. Yadav	Y.S.R. Venkata Rao
Place : Hyderabad	Chairman	Managing Director
Date : 27 May, 2023	DIN: 02014136	DIN: 00345524