Alora Trading Company Ltd Management Discussions.

Economy:

Economic growth is expected to pick up, supported by recovery in investments and robust consumption amid a more expansionary stance of monetary policy and some expected impetus from fiscal policy. The government is expected to continue implementation of structural and financial sector reforms with efforts to reduce public debt to secure growth.

The company is looking for further opportunities in other industrial segments and products. The company has been working on its strategy of reducing each sector specific dependency and adding new customers each year. The company managed to put up a moderate financial performance despite all these uncertainties.

Covid-19 Impact

During FY 2019-20 the Indian economy was experiencing a slowdown and to add to that corona virus pandemic hit the country at the end of FY 2019-20, and the consequent slowdown have worsened the economic situation in the country. The effects of these events have been felt the world over and all nations are struggling with fighting with COVID-19 to save the lives of humans and to bring the economy on track.

Real Estate, Construction and Infrastructure:

According to reports, Indias real estate sector is expected to grow to US$ 1 trillion by 2030, accounting for nearly 13%of the countrys GDP. The catalysts for this growth can be attributed to rapid urbanization, increasing emergence of nuclear families and rising household incomes.

The infrastructure sector has been under pressure due to the liquidity crunch and rising input costs. These challenges coupled with the current economic downturn has affected the growth in this segment. However, for the growth oriented economy like India, infrastructure is never out of favour. The governments focus on development of infrastructure coupled with the growth in the economy shall boot the prospects for the infrastructure sector.

Financial Performance:

Particular 2019-20 2018-19
Revenue from operation 4792.95 4468.71
Other Income 0.00 0.00
Total Revenue 4792.95 4468.71
Less : Expenditure 4780.49 4448.29
Profit before Tax 12.46 20.42
Prior period Expenses 0.00 0.00
Less : Current Income Tax 3.10 5.31
Less : Deferred Tax (0.14) 0.00
Profit / Loss After Tax 9.49 15.11
Earnings Per Share (Basic) 0.08 0.12
Earnings per Share (Diluted) 0.08 0.12

The financial year 2019-20 has indeed been a challenging year for all the industry in the economy. During the financial year 2019-20, the Total Revenue is Rs. 4792.95 Lakhs as compared to Rs. 4468.71 Lakhs in the previous financial year 2018-19. The Company has posted a net profit of Rs. 9.49 Lakhs during the year as compared to a net profit of Rs. 15.11 Lakhs earned in the previous year.

Significant Changes in the Key Financial Ratios:

Key Financial Ratios FY 2019-20 FY 2018-19 % Change (YOY) Remarks
Debtors Turnover Ratio 1.505 2.602 (1.097) (72.87)
Inventory Turnover Ratio NA NA NA NA
Interest Coverage Ratio 10.865 0.882 9.983 91.88
Current Ratio 9.926 0.995 8.931 89.98
Debt -Equity Ratio 0.011 0.000 0.011 100.00
Operating Profit Margin 0.003 0.005 (0.002) (75.75)
Net Profit Margin 0.002 0.003 (0.001) (70.70)
Return on Net worth 0.007 0.011 (0.004) (60.23)

Opportunities and Threats:

The present situation in the economy especially in the real estate sector is challenging as well as a great opportunity to build a strong foundation for future growth. It is during such challenging phases that the businesses are able to perform to the best of their abilities. There are several business consolidations, acquisitions, collaborations that lead the way for the next growth phase in the segment.

Your company is mindful of this unique situation and is open to grab any opportunity that comes its way to build long term sustainable business. There is a possibility for diversification in business through acquisition of assets or businesses, if available at reasonable valuation.

As there are some good opportunities, there are also risks associated which needs to be dealt with atmost caution. Your company is aware of the adverse impact of over leveraging and is committed to ensure that it will not engage in any activity which will expose the company to such risks.

Internal Control Systems and their adequacy::

The Company has put in place adequate systems of internal control commensurate with its size and the nature of its business. These systems provide a reasonable assurance in respect of financial and operational information, compliance with both applicable statutes & corporate policies and safeguarding of the assets of the company.

The company has a rigorous business planning system to set targets and parameters for operations which are reviewed against actual performance to ensure timely initiation or corrective action if required.

Industrial Relations and Human Resources:

The human resource philosophy and strategy of your Company have been designed to attract and retain the best talent to create a workplace environment that keeps employees engaged, motivated to encourage innovation. Your Company has fostered a culture that rewards continuous learning,

collaboration and development, making it future ready with respect to the challenges posed by ever changing market realities. Employees are your Companys most valuable asset and your Companys processes are designed to empower employees and support creative approaches in order to create enduring value. Your Company maintains a cordial relationship with its employees.

The company also believes in recognizing and rewarding employees to boost their morale and enable to achieve their maximum potential. The need to have a change in the management style of the company is one of the key focus areas this year.

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 securities 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 Indian demand and supply conditions, finished goods prices, input materials 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 within which the Company conducts business and other factors such as litigation and labour negotiations. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent development, information or events or otherwise.