Bhagawati Gas Ltd Management Discussions

The Management of the Company is pleased to present its report on the Industry Scenario including on the Companys performance during the financial year 2022-23.

Indian Economy REVIEW

In 2022-23, the country was marked with the outbreak of the second and third wave of the COVID-19 pandemic. Though the impact of the third wave was not much, the second wave took a heavy toll on the economy and peoples lives. Following the onslaught of the second wave of COVID-19, Indias economy was headed for a recovery.

THREATS, RISKS AND CONCERNS

The Company is concerned about prevailing exposure norms, financial position, entry of new players in the market, rising competition from banks & multilateral agencies, uncertain business environment, fluctuation in rupee, likely increase in cost of capital due to volatile market conditions. Further, the state of business and policy environment in the country also has a cascading effect on the interest-rate regime, cost and availability of raw materials and gestation period & capital outlays required for raw material. General economic conditions may also affect the capacity and production of the company.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

As on date your company is doing business activity of supply and installation of medical oxygen gas plant and the Company is continue doing the business of treatment of waste water and water bodies like River, Lake, Pond, Drain etc. as well treatment of Industrial effluents by using Phycore mediation technology.

OUTLOOK

During the financial year 2022-23, the Company supplied a medical oxygen gas plant to UP State PWD. The Company is looking more opportunity for installation of such medical oxygen plant. In addition, after 2 years pandemic, the Company received orders for cleaning of water bodies which were executed during the year. The Company is hopeful of getting more business in such activities during the year.

In the gaseous business during the year, the Company has participated in EOI floated by THDC India Limited a Govt. Undertaking for putting-up a Green Hydrogen Plant in their premises in Rishikesh.

Further the Honorable Prime Minister has laid emphasis for use of Hydrogen as alternative source fuel which is also in no polluting Clean Energy.

Bhagawati Gas Limited has in principal made an understanding with a Canadian Company for supply of Technology, Engineering and sourcing of plant and equipment for production of Green Hydrogen.

But the increasing government regulations and focus on water and water management such as the Swachh Bharat Mission, the Clean Ganga initiative, the National Rural Drinking Water Programme, along- with stricter enforcement of the environmental norms for polluted water discharge, reduced carbon footprint, waste water treatment and requirement of zero liquid discharge plants from various industries will also drive the demand for water and wastewater treatment solutions.

During the period under review, your company took the initiative to diversify its activities and decided to enter into the business of Waste water treatment through phyco remediation technology. Technical papers have been prepared and technical presentation has been conducted before various Government Departments including "Navami Ganga Authority". Your company is expecting to get good business in this area in the coming years.

Rapid urbanization, dwindling fresh water reserves, a widening demand-supply gap and a depleting groundwater table will keep the water treatment business thriving for a long time. An Ernst & Young (E&Y) study says the Indian water sector could require investment of around $130 billion till Wastewater management, in particular, is emerging as a key thrust area. Water availability is a huge challenge for everyone today in industry, and decisions on industrial locations are now taking into account the availability of adequate water. Public awareness is also growing very fast with the Internet explosion as information flows across geographies in minutes.

The Indian water and wastewater market is growing at a steady rate of 10-12 percent every year. Government-related projects contribute over 50 percent of the revenues in this market while private sector funds constitute the rest of it.

With the growing rate of industrialization and urbanization India faces up with the major challenge of providing for the robust and clean water supplies for all domestic and commercial needs. Also, a conscious effort is on from Government in regards to reduce the pollution levels amongst countrys fresh water river sources and better accommodate the guidelines and regulations for maintaining the clean sources of water.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company maintains an adequate system of Internal Controls including suitable monitoring procedures to ensure accurate and timely financial reporting of various transactions, efficiency of operations and compliance with statutory laws, regulations and Company policies. Suitable delegation of powers and guidelines for accounting has been issued for uniform compliance. In order to ensure that adequate checks and balances are in place and internal control systems are in order, regular and exhaustive Internal Audit of Office/plant are conducted by the in-house Internal Audit Division and external professional audit firm. The Internal Audit covers all major areas of operations, including identified critical/risk areas, as per the Annual Internal Audit Programme. The Audit Committee of Directors periodically reviews the significant findings of different Audits, as prescribed in the Companies Act, 2013 and in the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

FINANCIAL AND OPERATIONAL PERFORMANCE

During the period under review, your company diversifies its business activities in the business of Waste water treatment through phyco remediation technology and supply and installation of medical oxygen gas plant. Technical papers have been prepared and technical presentation has been conducted before various Government Departments.

Your company is expecting to get good business in this area in coming years.

KEY FINANCIAL RATIOS

During the year, on a Financial Statement, there was no significant change in the financial ratios compared to that of the previous year.

HUMAN RESOURCES / INDUSTRIAL RELATIONS

Human resource management practices and processes play an active role at the company. The HR function is responsible for institutionalising the values amongst the employees through robust foundation architecture, organisational effectiveness and strong winning culture. We nurture our employees for the long run though a structured role architecture and job responsibilities. Our workforce planning and segmentation further help our employees evolve in their career progressions. This leads to high performance culture and brings in a sense of maturity to handle larger responsibilities and further accelerate into leadership roles.

The company has a competency based performance and potential appraisal systems for identifying and developing managerial talents and is reviewed on an ongoing basis. Emphasis is laid on providing adequate training to its employees, to meet the attitudinal and cultural values of the organization ethos to achieve customer satisfaction. As on March 31, 2023, the Companys total Manpower stood 13 employees.

INTERNAL CONTROLS SYSTEMS

The Companys internal control systems adequately includes set of rules, policies and procedures that drive business, increase efficiency and strengthen adherence to policies. These controls and systems are designed keeping the nature of our business, its size and complexity in mind. Our statutory and internal auditors review our business and procedures on a periodical basis to avoid errors and a systematic flow of our business activities. All the significant observations, if any, are duly acted upon promptly. Reports of the same are thoroughly reviewed by the Audit Committee at their meeting.

The internal control systems are supplemented by an extensive program of internal audits. The internal audit function is empowered to examine the adequacy, relevance and effectiveness of control systems, compliance with policies, plans and statutory requirements.

CAUTIONARY STATEMENT

This document contains statements about expected future events, financial and operating results of Bhagawati Gas Limited, which are forward looking. By their nature, forward looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties.

There is significant risk that the assumptions, predictions and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as several factors could cause assumptions, actual future results and events to differ materially from those expressed in the forward looking statements. Accordingly, this document is subject to the disclaimer and qualified in its entirely by the assumptions, qualifications and risk factors referred to in the Managements Discussion and Analysis of Bhagawati Gas Limiteds Annual Report 2022-23.

Bhagawati Gas Limited

Sd/-

Rakesh Samrat Bhardwaj

Chairman & Managing Director

DIN:00029757

Date:29.08.2023

Place: New Delhi