Caveat
This section of Annual Report has been included in adherence to the
spirit enunciated in the code of Corporate Governance approved by the Securities and
Exchange Board of India. Though, utmost care has been taken to ensure that the (opinions
expressed toy the Management herein (contain its perceptions on most of the important
trends having a material impact on the Companys operations, no representation is
made that the following presents an exhaustive coverage on and of all issues related to
the same. Further, the discussion following herein reflects the perceptions on major
issues as on date and the (opinions expressed here are subject to change without notice.
The Company undertakes no obligation to publicly update or revise any of the (opinions or
statements expressed in this report, consequent to new information, future event, or
otherwise. This report should be read in conjunction with the financial statements
included and the notes attached.
1. Industry Structure & Development:
Overview of Current Trends:
Shrimp are invertebrate marine animal having an elongated body that is
often used as a food product. This is considered a nutritious since it includes proteins,
selenium, vitamins, phosphorous, magnesium, copper, iron, and vitamin B12. Many of the
health benefits associated with shrimp consumption are weight loss, age management, better
bone strength, reduced menstrual pain, and the prevention of cardiovascular diseases.
Shrimp is considered one of the most commonly consumed seafood. In
recent years, it gets popular among seafood lovers. Shrimp belong to the family
Malacostraca, available in freshwater lakes and streams and deep and shallow waters. It is
an invertebrate marine animal with a flattened and elongated body with long legs and
antennae. Shrimps are a rich source of phosphorus, antioxidants, proteins, selenium,
copper, iron, magnesium, omega-3 fatty acids, vitamin B and D. It is also preferred for
losing weight, relieving eye fatigue, lowering blood pressure, improving bone and brain
health, and minimizing the chances of developing cardiovascular diseases. The global
aquaculture market grew from $37.66 billion in 2022 to $41.45 billion in 2023 at a
compound annual growth rate (CAGR) of 10.0%. The Russia-Ukraine war disrupted the chances
of global economic recovery from the COVID-19 pandemic, at least in the short term. The
war between these two countries has led to economic sanctions on multiple countries, a
surge in commodity prices, and supply chain disruptions, causing inflation across goods
and services and affecting many markets across the globe. The aquaculture market is
expected to grow to $56.86 billion in 2027 at a CAGR of 8.2%.
The rising demand for seafood is expected to propel the growth of the
aquaculture market going forward. Seafood refers to edible aquatic animals, including both
freshwater and ocean creatures, such as lobsters, mussels, crabs, and sometimes other sea
creatures. The rise in demand for seafood helps to increase the prominence of aquaculture
in total fish supply. For instance, according to the Organization for Economic Cooperation
and Development (OECD), a France-based intergovernmental economic organization, 90% of the
fish produced will be consumed by humans, with consumption anticipated to increase by
16.3% by 2029. Therefore, the rising demand for seafood will drive the growth of the
aquaculture market.
(Source:
https://www.researchandmarkets.com/reports/5766638/aquaculture-global-market-report#:~:text=The%20global%20aquaculture%20market%20grew,least%20in%20the%20short%
20term.) https://www.expertmarketresearch.com/reports/india-shrimp-market
https://www.marketresearch.com/Renub-Research-v3619/Global-Shrimp-Production-Export-Import-14515533/
Global Scenario:
The global aquaculture market grew from $37.66 billion in 2022 to
$41.45 billion in 2023 at a compound annual growth rate (CAGR) of 10.0%. The growth rate
of the Global Aquaculture Market is 8.2%, with an estimated value of $56.86 billion by
2027. The Global Aquaculture Market is estimated to be worth $56.86 billion by 2027.
The aquaculture market size is estimated to grow at a CAGR of 4.43%
between 2022 and 2027. The market size is forecast to increase by USD 56.93 billion. The
growth of the market depends on several factors, including rising awareness of aquaculture
products, the popularity of polyculture farm methodology, and the increased presence of
better aquaculture strains from different farming methods.
This aquaculture market report extensively covers market segmentation
by type (fresh water aquaculture, marine water aquaculture, and brackish water
aquaculture), culture (net pen culture, floating cage culture, pond culture, and rice
field culture), and geography (APAC, North America, Europe, South America, and Middle East
and Africa). It also includes an in-depth analysis of drivers, trends, and challenges.
Furthermore, the report includes historic market data from 2017 to 2021.
The increased preference for organic aquaculture is the key trend in
the market. Consumers are becoming more health and environmentally conscious and willing
to pay for sustainably produced seafood free of harmful chemicals. Organic aquaculture is
a farming method that avoids the use of antibiotics, synthetic pesticides, and other
harmful chemicals and instead relies on natural inputs such as organic feed, probiotics,
and organic flake systems. The demand for organic aquaculture is also driven by growing
concerns about the environmental impacts of traditional aquaculture, such as the use of
antibiotics and chemical additives that can pollute waterways and damage marine
ecosystems.
Organic aquaculture practices aim to minimize negative environmental
impacts and promote the health and welfare of farmed fish. With these trends, people tend
to pay more for seafood that is sustainably produced and free of harmful chemicals, the
organic aquaculture market will outperform the conventional aquaculture market during the
forecast period. All these factors will foster the growth of the aquaculture market during
the forecast period.
(Source:
https://www.technavio.com/report/aquaculture-market-industry-analysis)
Indian Scenario
The India aquaculture market size reached 12.4 Million Tons in 2022.
Looking forward, IMARC Group expects the market to reach 19.9 Million Tons by 2028,
exhibiting a growth rate (CAGR) of 8.1% during 2023-2028.
Aquaculture or aqua farming, refers to the production of aquatic
organisms, such as freshwater fishes, crustaceans, mollusks, etc., under partially
controlled conditions. Some of the common types of aquaculture include fish farming,
shrimp farming, oyster farming, algaculture, mariculture, etc. Aquaculture also includes
the production of ornamental fishes to support recreational and commercial fisheries.
India is traditionally a freshwater aquaculture country with a historical record of fish
farming in private and community ponds. The vast coastal area of India offers immense
opportunities for aquaculture in both marine and inland waters.
In India, the growing consumption of fish, owing to numerous health
benefits in enhancing digestion, improving skin health, boosting metabolism, etc., is
primarily driving the aquaculture market. In line with this, the shifting consumer
preferences from high-calorie meat products towards a protein-rich diet, including fish,
shrimps, mollusks, etc., are also propelling the market growth. Additionally, the rising
number of hatcheries, feed mills, and processing plants is further augmenting the
aquaculture market in the country. Moreover, the Indian government is launching numerous
initiatives, such as Pradhan Mantri Matsya Sampada Yojana, to establish a comprehensive
framework and reduce infrastructural gaps in the fisheries sector. In line with this, the
introduction of various awareness programs for educating fish farmers to enhance their
production volume and yield quality is also bolstering the aquaculture market in India.
Additionally, the escalating prevalence of numerous foodborne illnesses caused due to
pathogens present in conventionally cultured fishes is further catalyzing the demand for
organic variants. Apart from this, several key players are adopting innovative solutions
for the domestication and in-house cultivation of ornamental fish species in artificial
marine-like environments for recreational and commercial purposes. Moreover, the emergence
of sustainable cultivation systems, which are aimed at not disrupting the ecosystem,
protecting biodiversity, reducing pollution, etc., is expected to drive the India
aquaculture market in the coming years.
| Breakup by Environment: |
| Farmed Shrimp |
| Wild Shrimp |
| Breakup by Species: |
| L. Vannamei |
| Penaeus Monodon |
| Scampi |
| Breakup by States: |
| Andhra Pradesh |
| West Bengal |
| Gujarat |
| Tamil Nadu |
| Orissa |
| Maharashtra |
| Karnataka |
| Kerala |
| Others |
| Breakup by Shrimp Size: |
| 31-40 |
| 41-50 |
| 51-60 |
| 61-70 |
| >70 |
| Others |
| Breakup by End Use: |
| Hotels and Restaurants |
| Retail Shops |
| Hypermarkets and Supermarkets |
| Online Sales |
| Others |
| Breakup by End Form |
| Frozen |
| Fresh |
| Canned |
| India Inland Fish Industry: Breakup by Environment |
| Fresh Water |
| BrackishWater |
| Breakup by Species |
| Indian Major Carps |
| Exotic Carps |
| Pangasius |
| Clarias |
| Anabas |
| Rupchanda |
| Tilapia |
| Seabass |
| Others |
(Source: https://www.imarcgroup.com/india-aquaculture-market.)
SWOT Analysis:
SWOT analysis is an informative tool for assessing the potential of
aqua farming. It provides a complete picture of its potential strengths (S), weaknesses
(W), opportunities (O), and threats (T). It helps in problem identification, planning,
decision making, appropriate technology implementation, precautionary measures for
accelerating fish production at sustainable level, etc. A SWOT analysis carried out with
the participation of farmers in a community is summarized below:
• Strengths:
- Availability of diversified natural and man-made water resources in
rural areas with potential for higher productivity, cost reduction/saving, multiple
cropping/harvesting, risk reduction and reduced rate of degradation.
- Continuous accumulation of allochthonous organic matter from the
village catchment area and from domestic drainage enriches water resources with nutrients
for cost effective fish production.
- Availability of underutilized and/ or unutilized human resources,
agricultural and livestock wastes and cheaper fish feed ingredients.
- Availability of region- and resource-specific technologies.
- Involvement of common interest groups with equal and joint
responsibility lends strength to and facilitates better operation of aquaculture.
• Weakness:
- Poor organizational capacity among rural farmers due to preexisting
personal disputes and lack of capable community leaders.
- Rural farmers lack infrastructure, ponds, material inputs, credit
facilities, etc. for carrying out fish culture.
- Farmers are reluctant to participate in such schemes because of
inequity in multiownership of the community ponds.
- Weak research-extension linkages, poor cooperation among operational
agencies, low technical awareness among the community members, and a lack of commitment
and understanding from farmers, etc.
- Dual leasing policy, short leasing period, increased leasing rates,
multi-water rights for irrigation, bathing, drinking and other domestic purposes of the
community ponds.
- Vandalism among the fisher folk and social stigma, poor training
facilities at grassroots level, ambivalence towards the involvement of women in fish
culture and poor marketing facilities in the region.
Opportunities:
- Increased aquatic productivity and contribution to economic
efficiency, social equity and environmental sustainability.
- There will be equity in income, employment, food security, and
poverty reduction, as well as participation and empowerment of rural farmers and rural
women.
- Judicious utilization of available nutrient-rich village water
resources, human resources and waste materials for multi-commodity production at one
place.
- Easy implementation of carp seed production and rearing, composite
fish culture, integrated fish farming, cage/pen fish culture, value addition and
processing and marketing technologies through community approach.
- Landless and resource poor farmers have the opportunity to undertake
fish culture in leased out ponds.
- Rural poor get equal chance in decision making, planning,
implementation, harvesting and marketing, monitoring and evaluation, profit distribution
and feedback.
- There is participatory learning by fish farmers irrespective of sex
and age, and empowerment of the rural poor.
- Reduction in migration of fisherfolk to other parts of the country as
wageworkers.
• Threats:
- If aquaculture is not undertaken in unutilized and/or underutilized
village water bodies, they will be infested with aquatic weeds providing breeding grounds
for mosquitoes and may cause health hazards for the villagers.
- Entry of polluted water from agricultural surface-runoff, domestic
drainage and industrial effluents is not only a major threat to the survival of aquatic
organisms but also contributes to water deterioration and affects the sediment quality of
community ponds.
- Introduction of indiscriminate fishing and illegal species.
- Weed infestation, poor water quality and disease outbreak in fish.
- Natural disasters such as floods, cyclones and droughts.
- Declining per capita fish catch and irregular income generation.
- Unemployment, food insecurity and labour migration in search of a
means of livelihood.
- Reluctance to invest due to short leasing policy.
- Social conflict due to increased incomes from technology
implementation
• Source: Aquaculture Section of the Network of Tropical
Aquaculture and Fisheries Professionals (NTAFP) Report
2. Segment-wise or product-wise performance:
Your company has three business segment trading Shrimp medicines and
feeds, Shrimp Farming and Shrimp processing during the financial year 2022-23. The company
was engaged in Shrimp Farming with allied activities. The performances are reflected in
the balance sheet.
3. Outlook:
Indian shrimp industry has a very good scope to reach great heights and
emerge as a global leader. The company being global exporter is progressing in expanding
its outreach globally. Moreover the company is also going ahead with project in year 22-23
to expand its growth in Local Domestic Market. Currently the company has tied its shoes
tight to run on the path of LOCAL MARKET and ace it.
The company has also started to make its social presence in order to
make everyone enjoy the export quality of seafood offered by the company.
4. Risk and Concerns:
Shrimp Farming like any other farming activity, is dependent on nature.
Although all possible efforts are taken to mitigate the adverse effects of nature, but we
do not have full control on it. Our product being a live product is also prone to various
type of disease and so on. Seasonal production, low number of process house and perishable
nature of product are always a matter of concern. The companys operations might be
adversely impact due to incapacitation of sections of the global workforce due to exposure
to the pandemic COVID 19, reduced productivity due to employee stress and impact on
emotional well-being while under local lockdowns or quarantines, inability to provide work
from home access to some employees due to logistical or security or contractual reasons.
Demand for the companys product may be adversely affected not only in industry
segments directly impacted by the pandemic - like hotels and hospitality, but across other
segments as well due to a sharp slowing down of the worlds major economies. This is
likely to affect the companys earnings in the short and medium term.
5. Internal Control System :
The Company has in place an adequate system of internal control
commensurate with its size and nature of its business. These have been designed to provide
reasonable assurance that all assets are safeguarded and protected against loss from
unauthorized use or disposition and that all transactions are authorized, recorded and
reported correctly and the business operations are conducted as per the prescribed
policies and procedures of the Company. The Audit committee and the management have
reviewed the adequacy of the internal control systems and suitable steps are taken to
improve the same.
6. Discussion On Financial Performance with Respect to Operational
Performance
The Companys financial performance for the year ended on 31st
March, 2023 is summarized below: ,
| Financial Results and Appropriations |
Year Ended 31.03.2023 |
Year Ended 31.03.2022 |
| Gross Income from Operations |
36268.737 |
34,522.31 |
| Other Income |
837.853 |
770.75 |
| Total Revenue |
37,106.590 |
35,293.07 |
| Profit Before Tax and Exceptional items |
817.922 |
718.81 |
| Less: |
|
|
| Exceptional items |
" |
" |
| Profit Before Tax (PBT) |
817.922 |
718.81 |
| Less: Taxation |
112.567 |
144.10 |
| Net Profit after Tax (PAT) |
705.355 |
574.71 |
During the year, your Company recorded Total Revenue of 37,106.590
Lacs in financial year 2022-23 as compared to total revenue of 35293.07 Lacs in
financial year 2021-22 and Profit before Tax stood at 817.922 Lacs for the year
2022-23 as compared to Profit before tax of 718.81 Lacs in financial year 202122. Profit
after Tax stood at 705.355 Lacs for the financial year 2022-23 as compared to Profit
after Tax of 574.71 Lacs in financial year 2021-22.
7. Material Development in Human Resources
Your Company firmly believes that its human resources are the key
enablers for the growth of the Company and important asset. Hence, the success of the
Company is closely aligned to the goals of the human resources of the Company. Taking into
this account, your Company continued to Invest in developing its human capital and
establishing its brand on the market to attract and retain the best talent.Employee
relations during the period under review continued to be healthy, cordial and harmonious
at all levels and your Company is committed to maintain good relations with the employees.
8. Details of Significant Changes In Key Financial Ratios Interest
Coverage Ratio
The companys Interest Coverage ratio of 1.509 during the current
financial year (FY2023) which indicates that the Company has more than enough earnings to
cover interest payments. This further indicates a sound financial health of the company.
Current Ratio
The company is well able to maintain its Current Ratio above 1 which it
intended to in order to make sure it has enough resources to meet its short-term
obligations.
| In Lakhs (INR) |
Current Assets |
Current Liabilities |
Current Ratio |
| FY2021 |
22,269.44 |
18258.59 |
1.22 |
| FY2022 |
18,484.71 |
12,317.30 |
1.50 |
| FY2023 |
23,292.41 |
16,854.86 |
1.38 |
Debtors and Inventory Turnover Ratio:
Debtors Turnover Ratio measures how many times a business can
turn its accounts receivable into cash during a period. The company has been able to
maintain a ratio of more than 3 in the past couple of years, indicating good liquidity.
The inventory turnover ratio is an important measure as well which
measures how well a company generates sales from its inventory.
| Year |
Debtor Turnover Ratio (Sales/ Receivable) |
Inventory Turnover Ratio (Sales/
Inventory) |
| FY2021 |
3.27 |
2.48 |
| FY2022 |
4.91 |
2.87 |
| FY2023 |
6.28 |
2.68 |
Debt to Equity
The Debt Equity Ratio for the current financial year (FY 2023) if 1.93.
The FY2023 Debt- to Equity ratio of the company is indicating that it is gradually moving
to a stable capital structure, and is able to maintain its ratio well below the Industry
average.
Operating Profit Margin (%)
The Company is moving towards a stable Operating Margin Ratio; after
witnessing a couple of years of fluctuating margins
| In Lakhs (INR) |
EBIT |
Revenue from Operations |
EBIT Margin |
| FY2021 |
1810.500 |
29,747.422 |
6.09% |
| FY2022 |
1686.09 |
34,522.31 |
4.88% |
| FY2023 |
817.92 |
36,268.73 |
3.45% |
**Legal Processing Charges and Bank Charges have been deducted while
arriving at EBIT Net Profit Margin (%)
The companys FY2023 Net Profit increased by 22.73% as
compared to the previous year, with satisfactory increase in the margin.
| In Lakhs (INR) |
Net Profit |
Revenue From Operations |
Net Profit Margin |
| FY2021 |
424.96 |
29,747.42 |
1.43 % |
| FY2022 |
574.71 |
34,522.31 |
1.66% |
| FY2023 |
705.35 |
36,268.73 |
1.95% |
Return on Net Worth
The company has maintained positive Return on Equity since long years.
During the year company has attained positive return on equity of 9.06% which shows that
the company is efficient to utilize the capital and investments so as to maximize the
shareholders wealth.
| In Lakhs (INR) |
PAT |
NET WORTH |
RETURN ON NET WORTH |
| FY2021 |
424.960 |
5755.37 |
7.38% |
| FY2022 |
574.714 |
6331.18 |
9.01% |
| FY2023 |
705.35 |
7074.93 |
9.97% |
By order of the Board of Directors
|
For Zeal Aqua Limited |
Sd/- |
Sd/- |
SHANTILAL ISHWARLAL PATEL |
PRADIPKUMAR RATILAL NAVIK |
MANAGING DIRECTOR |
WHOLETIME DIRECTOR |
DIN:01362109 |
DIN:01067716 |
DATE: 17.08.2023 |
|
PLACE: SURAT |
|
+91-9892691696
