GLOBAL ECONOMY
The global economy grew at 3.4% in 2022 compared to a growth of 6.2% in
2021 according to the World Economic Outlook, released by the International Monetary Fund
(IMF) in April 2023. This slowdown was primarily due to rising central bank rates as a
result of high inflation, the impact of the Russia- Ukraine conflict, and sluggish
economic activity in China due to a resurgence of Covid-19 pandemic. IMF forecasts the
global growth to decline to 2.8% in 2023 and then rise again to 3.0% in 2024, dipping
below the pre- Covid-19 pandemic historical average of 3.8% (for the period 2000-2019).
IMF expects global inflation to decline in 2023 and 2024, from 8.7% in 2022 to 7.0% in
2023 and 4.9% in 2024. Global headline inflation peaked during the third quarter of 2022,
according to IMF. The lower inflation estimates for 2023 are partly due to decline in
international fuel and non-fuel commodity prices, as well as the cooling effects of
monetary policy tightening. IMF expects the emerging and developing Asia to grow by 5.3%
and 5.1% during 2023 and 2024, respectively.
In 2022-23, elevated core inflation led the Reserve Bank of India (RBI)
to maintain a tighter stance on the economy. RBI estimates headline inflation to be at
6.8% in 2022-23. However, RBI expects inflation to moderate in 2023-24 to 5.3%, but remain
well above its 4% target.
The Government of Indias budgeted estimate for capital expenditure
outlay in 2022-23 increased by 35.4% from around ? 5.5 Lakh Crores in 2021-22 to an
estimated ? 7.5 Lakh Crores for 2022-23. Further, the Union Budget of 2023- 24 has
allocated a substantial amount of approximately Rs 10 Lakh Crores for the countrys
infrastructure development. This is likely to be a key growth driver for the Indian
economy amid the current volatile macroeconomic conditions.
INDIAN ECONOMY
As per the Economic Survey 2022-24, Indias economic growth in FY23 has
been principally led by private consumption and capital formation and they have helped
generate employment as seen in the declining urban unemployment rate and in the faster net
registration in Employee Provident Fund. Moreover, Worlds second-largest vaccination
drive involving more than 2 billion doses also served to lift consumer sentiments that may
prolong the rebound in consumption. Still, private capex soon needs to take up the
leadership role to put job creation on a fast track.
It also points out that the upside to Indias growth outlook arises
from (i) limited health and economic fallout for the rest of the world from the current
surge in Covid-19 infections in China and, therefore, continued normalisation of supply
chains; (ii) inflationary impulses from the reopening of Chinas economy turning out to be
neither significant nor persistent; (iii) recessionary tendencies in major Advanced
Economies (AEs) triggering a cessation of monetary tightening and a return of capital
flows to India amidst a stable domestic inflation rate below 6 per cent; and (iv) this
leading to an improvement in animal spirits and providing further impetus to private
sector investment.
The Survey says, the credit growth to the Micro, Small, and Medium
Enterprises (MSME) sector has been remarkably high, over 30.6 per cent, on average during
Jan-Nov 2022, supported by the extended Emergency Credit Linked Guarantee Scheme (ECLGS)
of the Union government. It adds that the recovery of MSMEs is proceeding apace, as is
evident in the amounts of Goods and Services Tax (GST) they pay, while the Emergency
Credit Linked Guarantee Scheme (ECGLS) is easing their debt servicing concerns.
Apart from this, increase in the overall bank credit has also been
influenced by the shift in borrowers funding choices from volatile bond markets, where
yields have increased, and external commercial borrowings, where interest and hedging
costs have increased, towards banks. If inflation declines in FY24 and if real cost of
credit does not rise, then credit growth is likely to be brisk in FY24.
OUTLOOK
Indias real GDP is predicted to increase at 7.2 percent in 2022-23,
with growth of 16.2 percent in Q1, 6.2 percent in Q2, 4.1 percent in Q3, and 4 percent in
Q4. Inflation is expected to average 5.7 percent in 2022-23, with 6.3 percent in the first
quarter, 5.8 percent in the second, 5.4 percent in the third, and 5.1 percent in the
fourth. The economic interruptions created by the Russia-Ukraine conflict are mostly to
blame for the steep increase in inflation projections.
STONE INDUSTRY OVERVIEW Global Stone Industry
The global natural stone market size was valued at $33,375.3 million in
2020, and is projected to reach $50,465.1 million by 2030, registering a CAGR of 4.0%.
Natural stone is a mountain-acquired mineral, which includes quartzite, slate, limestone,
sandstone, marble, granite, and others. It majorly finds its application in residential
and commercial flooring and wall cladding, owing to its durability, hardness, and
aesthetic appearance. It finds applications in furniture, statuary, and monuments.
An expansion of building industry, owing to rise in investment in the
housing sector, and increased construction spending across various countries such as the
U.S., Japan, India, and others, which fuels the growth of the global natural stone. In
addition, rise in urbanization, and population growth, which is expected to rise in demand
for natural stones, for flooring, and wall cladding applications, boost the growth of the
global market. Benefits associated with natural stones such as long durable, aesthetic
presence, and reliable, in turn, boost adoption of slate, and limestone in the commercial
and residential building, which drive the growth of the global natural stone market.
Indian Stone Industry
India is one of the worlds leading producers of kota stone. The stone
business, worth Rs.25,000 crore, has massive reserves of 4 trillion cubic metres. In
addition, India has over 100 varieties of stone, which come in a variety of colours and
textures.
Opportunity And Threat
The market is experiencing robust growth due to a consistent increase
in the residential construction sector worldwide and rising individual spending on home
improvements. Countertops are typically installed in new homes as well as during kitchen
remodelling. Furthermore, there has been an increase in bank mortgage refinances and
loans, resulting in more credit being accessible for the renovation of existing
residences, which is driving up demand for countertop items.
Due to a growing preference for higher-priced materials over laminates,
the market value of the countertop sector is expected to expand over the projected period.
The demand for countertops is being fuelled by continued high growth in developing
economies such as China, India, and Brazil. Throughout the world, the countertop market is
on the rise. One positive aspect of this progression is that, as a result of the high
level of quality and low cost, more people are opting for stone countertops.
SEGMENT WISE PERFORMANCE
During the year 2022-23, Company engaged only in mining and processing
of Natural Stones, hence requirement of segmental reporting is not applicable.
FINANCIAL RATIOS
Financial ratios are provided under note no 38 of notes to financial
statements for the year ended 31st March 2023.
OVERSEAS SUBSIDIARY
During the year under review, the Company after obtaining approval of
the shareholders has sold/ transferred and disposed off entire shareholding of the
Company, together with its Wholly Owned Subsidiary, ASI Global Limited, held in Al Rawasi
Rocks & Aggregate LLC, Fujairah, UAE (an indirect subsidiary Co.) in favour of INJAZ
Capital Investment LLC, Dubai UAE;
During the year under review, ASI Global Ltd, a Wholly Owned Subsidiary
of the Company has filed an application under section 309 (1) (d) of the Companies Act,
2001 (Mauritius) for removal of its name from the records of the Registrar of Companies.
The process of liquidation has commenced in Mauritius in accordance with the applicable
laws.
DEVELOPMENT IN HUMAN RESOURCE / INDUSTRIAL RELATIONS
The Company takes immense satisfaction and pride in the knowledge that
each of our employees displays excellent commitment, hard work and dedication in all areas
of business. The Company has adopted a structured and well managed induction process as
well as management development programmes to help upgrade the skillset of its managers.
The senior management staff has a system of objective appraisal in place which is based on
key result areas. The Company is committed to nurturing, enhancing and retaining its top
talent through organizational development. This is an integral part of our Corporate HR
function and is a critical pillar to support the organizations growth and sustainability
in the long run
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company is equipped with an efficient and smoothly functioning
internal control and risk-mitigation system. Its constant assessment and revision based on
the new/updated standard operating procedures helps it remain up to date. The internal
control system of the company is equivalent to the size, scale and complexities of the
operations that it undertakes. The internal and operational audit is entrusted to M/s.
L.B.Jha & Co., a firm of Chartered Accountants. The major focus of the internal audit
is to review and analyse the controls and business processes along with benchmarking
controls with the best methodologies in the industry. The Audit Committee of the Board of
Directors actively reviews the adequacy and efficiency of the internal control systems and
makes suggestions to strengthen the same. The Company has a robust Management Information
System, which is an integral part of the control mechanism. The Audit Committee of the
Board of Directors, Statutory Auditors and the Business Heads are periodically apprised
for their well-researched internal audit findings and the corrective actions taken or
suggested by them. Audit plays an important role in providing assurance to the Board of
Directors. Significant audit observations and corrective actions taken band suggested by
the management are presented to the Audit Committee of the Board. The Internal Audit
function reports to the Chairman of the Company and Audit Committee in order to maintain
its independence and objectivity.
|
For ASI Industries Limited |
|
Deepak Jatia |
| Date: 29th May, 2023 |
Chairman and Managing Director |
| Place: Mumbai |
DIN 01068689 |
+91-9892691696
