ausom enterprise ltd share price Management discussions

(A) INDUSTRY STRUCTURE AND DEVELOPMENTS:

The Company at present is engaged in one segment activity i.e. trading of commodities, bullions, gold jewellery, shares & securities, units of mutual funds, diamonds and derivative transactions etc. Being very ancient in its nature, the trading industry is well organized in all respect. During the last decade, establishment of exchanges for such trading activities has also contributed in making trading more organized and transparent.

(B) OPPORTUNITIES AND THREATS

(1) Opportunities

• The Company is totally debt-free and now being run by well experienced promoters with having two decades of insightful knowledge of this industry.

• Trading activities has turned out to be fruitful and there is a good scope of future growth and profitability.

• Experienced people in the field of commodities/bullions trading will manage the trading activities.

(2) Threats

• Foreign currency fluctuation, more particularly, dollar and pound.

• Volatility in Commodities and trading markets.

(C) SEGMENT WISE PERFORMANCE OR PRODUCT WISE PERFORMANCE

The Company is engaged in one segment activity, hence segment wise performance is not required. The activities, which the Company has started from last thirteen years emerging as very potential, growing and profitable. In the current year also the Company has achieved good turnover and good profit.

(D) OUTLOOK

The trading industry has grown in all respects and has shown very good potential. Under the globalization, the trading activity has more scope internationally and is growing manifold. Even after establishing NCDEX and MCX, various new platforms for F & O contracts will emerge in near future.

(E) RISK AND AREA OF CONCERNS

• The trading business is a new line of business for the Company.

• There may be volatility in the trading market.

(F) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate internal control procedures commensurate with the size and nature of business. These procedures ensure efficient use and protection of the resources and compliance with policies, procedures and statutes. There is a periodical review mechanism for ensuring the sustenance and up-gradation of these systems.

(G) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE.

During the current year the Company has generated revenue of Rs. 17775.82 Lakhs From Trading activity with a profit of Rs. 120.58 Lakhs(PAT).

(H) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLYOED.

Recognizing that people are an important part of the organization, a major exercise in training and development of employees has been undertaken at all levels. The Company gives a lot of importance to Human Resource activities. These activities have helped to retain and motivate employees of the Company. During the financial year 2022-2023 there are total 3 Employees working.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THERE FOR

DEBTORS TURNOVER

2022-23 :9.65 times

2021- 22 : 0.45 times

Increase of 2064.00%

Explanation: Increase is mainly on account of increase in revenue from operation in the current financial year as compared to previous financial year.

INVENTORY TURNOVER

2022- 23 : 12.53 times

2021- 22 : 1.62 times

Increase of 673.00%

Explanation: Increase is mainly on account of increase in cost of goods sold in the current financial year as compared to previous financial year.

INTEREST COVERAGE RATIO

2022- 23 : 2.01 times

2021-22 : 3.94 times

Decrease of 48.98%

Explanation: Decrease is mainly on account of reduction in the profit of current financial year as compare to previous financial year.

CURRENT RATIO

2022-23 :1.38 times

2021- 22 : 2.36 times

2020- 21 : 1.29 times

Decrease of 41%

Explanation: Decrease is primarily on account of increase in current borrowings in the current financial year as compared to previous financial year.

DEBT EQUITY RATIO

2022- 23 : 0.47 times

2021- 22 : 0.09 times

Increase of 446%

Explanation: Higher ratio is mainly on account of increase in current borrowings in the current financial year as compared to previous financial year.

RETURN ON NET WORTH

2022- 23 : 1.81%

2021-22 : 6.93%

Decrease of 74%

Explanation: Decrease is mainly on account of reduction in the profit as well as increase in the borrowing of the current financial year as compared to previous financial year.

(I) DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH DETAILED EXPLANATION THEREOF

(J) CAUTIONARY STATEMENT

Estimates and expectations stated in this Management Discussion and Analysis may be “forward-looking statement” 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 your Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and international markets, changes in the Government regulations, tax laws, other statutes and other incidental factors.

	For AuSom Enterprise Limited
	Kishor P. Mandalia
Place: Ahmedabad	Managing Director
Date: 9th August, 2023	DIN:00126209