Asi Industries Ltd Management Discussions

Amidst the prevailing global economic landscape, challenges such as a subdued manufacturing environment, faltering trade flows and persistent inflation concerns shows a complex picture for the future ahead. However, amidst these challenges, certain sectors, notably services, demonstrate resilience. The recent update from the International Monetary Fund (IMF) offers a glimmer of hope, with a modest upgrade in growth projections for 2024 and 2025. Global growth is projected at 3.1 percent in 2024 and 3.2 percent in 2025, marking an increase from previous forecasts.

Furthermore, there is a notable decline in global inflation rates, driven by the resolution of supply-side constraints and the implementation of tighter monetary policies. Global headline inflation is anticipated to decrease to 5.8 4.4 percent in 2025, with the latter figure being revised downward.

Additionally, the year 2024 also marks changing geopolitical situation for several nations which may introduce a degree of uncertainty.

These changing landscapesholdimplicationsbeyondborders,influencingeconomic and public policy in an increasingly fractious global landscape. Despite potential challenges, these developments indicates the ongoing efforts to navigate economic challenges while striving for stability and sustainable growth in the global economy.

Despite global economic uncertainties, Indias economic resilience shines through, as Moodys (a leading provider of credit ratings, research, and risk analysis) predicts it to maintain its position as the fastest-growing economy among G-20 nations. In parallel, the Interim Budget 2024 presented by Union Finance Minister Nirmala Sitharaman outlined pivotal initiatives to propel India towards becoming a developed nation by 2047.

This positive economic outlook is reinforced by the governments proactive measures, as evidenced by the interim budget for fiscal year 2024-25, which targets a capital expenditure allocation of Rs 11.1 lakh crore, signifying a 16.9% increase over the previous years estimates.

While private industrial capital spendinghasbeensluggish,ongoingbenefitsfrom supply chain diversification and the governmentsProduction Linked Incentive scheme are expected to spur investment in key manufacturing sectors. Additionally, in 2024, Indias power sector is set to witness substantial expansion in renewables alongside the addition of new coal-based capacities, driven by rising demand. Despite the sectors robust growth, India remains committed to its climate goals, aiming to reduce emissions intensity by 45% by 2030 and achieve net-zero emissions by 2070. To realize these objectives, India plans to scale up its renewable capacity to 500 GW by 2030, supported by incentives for domestic solar manufacturing. Furthermore, industrial sectors are increasingly adopting renewable energy sources in preparation for the implementation of a compliance carbon market.

During the year under review, company recorded sales of Rs. 14469.23 Lakhs (P.Y Rs. 13,760.55 Lakhs). Thus, there is increase in revenue of the company owing to which company has recorded a net profit of Rs. 2511.06 Lakhs during the year under the review as compared to net profit of Rs. 1727.51 Lakhs of previous year.

The upward revision of Indias 2024 growth estimate to 6.8% from 6.1% reflects stronger-than-growth estimated at 6.4% for 2025, with nominal gross domestic product (GDP) for FY 2023-24 at current prices being estimated at INR 293.90 trillion (US$ 3.53 trillion). Robust indicators such as goods and services tax collections, rising auto sales, and double digit credit growth point to resilient urban consumption demand, complemented by expanding manufacturing and services PMIs on the supply side.

The stone market size has grown strongly in recent years. It will grow from $12.72 billion in 2023 to $13.66 billion in 2024 at a compound annual growth rate (CAGR) of 7.4%. The growth in the historic period can be attributed to increased construction industry, urbanization, increased infrastructure development, landscaping projects, historical restoration.

The stones market size is expected to see strong growth in the next few years. It will grow to $17.78 billion in 2028 at a compound annual growth rate (CAGR) of 6.8%. The growth in the forecast period can be attributed to smart cities initiatives, energy efficiency in quarrying, rise of prefabricated construction, cultural and religious projects, circular economy practices. Major trends in the forecast period include digital transformation in stone industry, sustainable quarrying and processing, innovations in stone finishes, smart stone applications and online stone marketspaces.

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. Furthermore, there has been an increase in bank mortgage refinances and loans, resulting in more credit being accessible for the construction of new houses and renovation of existing residences, which is driving up demand for natural stones.

Due to cost effective and long lasting nature of kotah stone and government thrust for spending on infrastructure projects , company expects better demand for natural stones in coming years.

Competition from the unorganised sectors, cost effective vitrified tiles and other artificialstones , huge transportation cost may pose threat for organised natural stone sectors in coming years. Management of the Company has been putting its best effort to reduce the cost of manufacturing and development of new products.

During the year 2023-24, Company was engaged only in mining and processing of Natural Stones, hence requirement of segmental reporting is not applicable.

1. As profitability has been increase during the year, Current Ratio is also improved mainly due to increase in current investment as well as decreased in statutory liabilities.

2. Debt Service Coverage Ratio is improved significantly due to increase in profitability during the year and due to reduction in Current Matutities of Long Term Borrowings on account of full repayment of some term loan before due date.

3. Return on Equity Ratio, Net Profit Ratio, Return on Capital Employed and Return on Investment is improved due to increase in profitability during the year as compared to last year.

4. Movement in the Inventory Turnover Ratio is due to reduction in inventory level on account of sale of stock.

5. Movement in Trade payables turnover ratio is due to increase in Sundry Creditors as compared to last year.

As disclosed in the notes to financial statements.

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.

Number of persons employed: 536 employees as on 31st March 2024.

The Company is equipped with an efficient and smoothly functioning of internal control and risk-mitigation system. Its a 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.,firmof 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 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 providingassurancetotheBoardofDirectors.Significantaudit observations and corrective actions taken and 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.

The mining industry has always been risky, with worker safety concerns representing only a portion of the challenges. Increasingly strict regulations, reliance on technology, inconsistent demand for raw materials and high commodity prices are matters of high importance for a mining company.

Risk is inherent to a business and may have a varying degree of impact on the achievement of strategic objectives as well as the operations of the business. Risk Management is performing a series of activities designed to minimise this impact. Based on a comprehensive understanding of business objectives and strategies, and the external and internal environment impacting these objectives, potential risks that could threaten the fulfilment of corporate objectives are identified and are dealt with accordingly.