CDG Petchem Ltd Management Discussions

CDG Petchem Limited founded by a team of professional entrepreneurs & qualified experts with the main objective to supply high quality product services to the discerning clients. It will be a leading business entity in India engaged in the activities Merchant Export & Third country Trade, Imports Marketing & Distribution of Mats / Mattresses, Insulation Sheet and Pillows.

Your Company has diversified its business profile through its 100% subsidiary company (Morbido Merchandise Private Limited) for the purpose of Imports Marketing & Distribution Services of world class products (Chemicals) to several industries ranging from Plastics, Polymers, Construction, and Paint etc. It also offers to our Indian customers a broad range of products from leading producers located worldwide through Imports, Marketing & Distribution of multinational company.

The subsidiary Company will participate in growth of CDG Petchem Limited by expanding its customer base of Chemicals to several industries ranging from Plastics, Polymers, Construction, and Paint etc. with international collaborations.

b) Opportunities

The Indian Plastic Industry clearly has the potential to continue its fast growth. It is expanding at a phenomenal pace, with plastic being significantly used in innovating new applications in industries like food processing, packing, healthcare thereby increasing demand for plastic altogether.

The industry has many growth opportunities owing to the wide applicability of Plastic / disposable products. The Demand for companies Products has been constantly on an increase in the market.

c) Threats, Risks & Concerns

Investors should read the Risk Factors mentioned in this Information Memorandum. Over the next few years, competition in the industry is also expected to rise considerably, as a result of Global trends. To survive competition both polymer manufacturer and processors will need to adopt radically new methods and approaches to reduce costs, improve market and customer services and management performance.

The international oil Prices have been constantly fluctuating leading to up and down in raw material prices.

The threats/ risks for the industry relate to stiff competition throughout and lesser margins. The same can gradually overcome by the industry in view of the wide usage of the PP products and also growing of demand with new technologies to reduce costs to become more competitive.

d) Segment wise performance

The segment wise performance is not applicable as the company has only one segment.

e) Outlook

The Company has altered its main objects in the MOA to shift its business from the Plastic industry to transportation sector.

f) Discussion on financial performance with respect to operational performance

During the year under review, the standalone turnover for the current year is Rs. 898.73 Lakhs as against Rs.1539.98 Lakhs in the previous year. During the Year the companys Loss before tax is Rs.95.74 Lakhs as against a Loss of Rs.95.05 Lakhs in the previous year. g) Internal Control system and their adequacy

The Company has an internal control system commensurate with the size and nature of its business. There is a proper and adequate system of internal controls to ensure that all activities are monitored and controlled against unauthorized use or disposition of assets. The Company ensures adherence to all internal control policies and procedures as well as compliance with all regulatory guidelines.

The Audit Committee supervises the checks and controls exercised, and reports any suggestions or deviation on a continuing basis. The authority and responsibility of every employee is defined, thus, leaving no space for any deviations.

h) Material developments in Human Resources/Industrial Relation front, including number of people employed

The focus is on capability development, performance management and employee engagement. This is expected to improve cost competitiveness through greater levels of employee participation, commitment and involvement.

The Company recognizes the importance and contribution of its employees to the growth and development of the Company. The Company continued to maintain cordial relations with employees and staff. The Company has 0 employees on the rolls, as on 31st March 2025.

II. Financial /operational performance: Sources of Funds 1. Share capital

The Company has only one class of shares- equity shares of par value Rs. 10/- each. Our Authorised share capital is Rs. 500.00 Lakhs (50,00,000 shares of Rs. 10/- each) and issued and paid-up capital is Rs.307.75 Lakhs (30,77,500 shares of Rs. 10/- each)

2. Reserves and Surplus

At the beginning of the year the company has Reserves as follows:

Share Premium Nil, General Reserve Nil and debit balance of Profit and Loss Account of Rs.222.63 Lakhs and at the end it was Rs. 328.38 Lakhs

Application of Funds

3. Fixed Assets

During the year under review company has incurred amounting to Rs.35 Lakhs as capital expenditure.

4. Deferred taxes Assets and Liabilities

The Company has Deferred Tax Liability (Net) amounting to Rs.32.67 Lakhs as against a liability of Rs.22.66 Lakhs in previous year, attributable to difference between depreciation as per companies act 2013 and Income Tax Act- 1961

Risk Management Framework:

In todays economic environment, Risk Management is a very important part of business. The main aim of risk management is to identify, monitor and take precautionary measures in respect of the events that may pose risks for the business. Your

Companys Board believes that to ensure sustainable business growth with stability of affairs and operations of the Company, periodical review of various risks having a bearing on the business and operations is vital to proactively manage uncertainty and changes in the internal and external environment to limit negative impacts and capitalize on opportunities. Further, it is also belief of your management that Risk Management Framework enables a systematic approach to risk identification, leverage of any opportunities and provides treatment strategies to manage, transfer and avoid or minimize the impact of the risks.

Keeping in view of the above, your Companys risk management is embedded in the continuous business processes and as a part of review of business and operations, your Board with the help of the management periodically reviews various risks associated with the business and products of the Company and consider appropriate risk mitigation process. However there are certain risks which cannot be avoided but the impact can only be minimized.

The risks and concerns associated with the segment of your companys business are discussed while reviewing segment-wise Management and Discussion Analysis. The other risks that the management reviews also include:

a. Industry & Services Risk: this includes Economic risks like demand and supply chain, Profitability, Gestation period etc.; Services risk like infrastructure facilities; Market risk like consumer preferences and distribution channel etc.; Business dynamics like inflation/deflation etc.; Competition risks like cost effectiveness b. Management and Operational Risk: this includes Risks to Property; Clear and well defined work process; changes in technology / up gradation; R&D Risks; Agency network Risks; Personnel & labour turnover Risk; Environmental and Pollution Control Regulations etc.; Locational benefits near metros c. Market Risk: this includes Raw Material rates; Quantities, quality, suppliers, lead time, interest rates risk and forex risk. d. Political Risk: this includes Elections; War risk; Country/Area Risk; Insurance risk like Fire, strikes, riots and civil commotion, marine risk, cargo risk etc.; Fiscal/Monetary Policy Risk including Taxation risk. e. Credit Risk: this includes Creditworthiness; Risk in settlement of dues by clients and Provisions for doubtful and bad debts f. Liquidity Risk: this includes risks like Financial solvency and liquidity; Borrowing limits, delays; Cash/Reserve management risks and Tax risks g. Disaster Risk: this includes Natural calamities like fires, floods, earthquakes etc.; Man made risk factors arising under the Factories Act, Mines Act etc.; Risk of failure of effective disaster Management plans formulated by the Company. h. System Risk: this includes System capacities; System reliability; Obsolescence risk; Data Integrity risk & Co- ordination and Interface risk. i. Legal Risk: this includes Contract risk; Contractual liability; Frauds; Judicial Risk and Insurance risk j. Government Policy: This includes Exemptions, import licenses, income tax and sales tax holidays, subsidies, tax benefits etc. Further your Board has constituted a Risk Management Committee, inter-alia, to monitor and review the risk management framework.

Ratios:

S. No	Particulars	2024-25	2023-24	Improvement / (Deterioration)
Debtors	Debtors/Revenue from
1.		3.03	4.16	(0.27)
Turnover	Operation (Days)
Inventory	Cost of goods sold/Average
2.		31.85	5.96	5.34
Turnover	Inventory
Interest Coverage	Earnings before Interest and
3.		1.31	(0.01)	131.00
Ratio	Tax(EBIT)/Interest
	Current Assets/Current
4. Current Ratio		4.19	0.96	4.36
	Liabilities
	Total Outside
5. Debt Equity Ratio	Liabilities/Shareholders	(1.18)	10.72	(0.11)
	Equity
Operating Profit
6.	Operating Profit or EBIT/Sales	(0.06)	0.01	(6.00)
Margin
7. Net Profit Margin	Net Profit/ Sales	(0.12)	(0.06)	(2.00)
Return on Net
8.	Net profit/ Shareholders Equity	(5.12)	(1.07)	(4.79)
worth