Overview Inflation reached decade highs at the beginning of FY 2023 due to geopolitical
uncertainties. However, since the second half of the year, inflation has been moderating,
indicating a positive outlook. The global economy appears to be on track for a slow yet
steady recovery from COVID-induced challenges and the Russia-Ukraine war. Global economic
output is likely to grow gradually, owing to a stabilizing inflation trajectory that is
reviving consumer sentiment and investor confidence. Emerging market and developing
economies (EMDEs) are also witnessing growth across multiple sectors, fueled by government
expenditures in infrastructure and manufacturing sectors.
Central banks monetary policies are expected to bear fruit, leading to a decline in
global inflation from *8.7% in 2022 (among the highest in decades) to 7.0% in 2023 to 4.9%
in 2024. It is anticipated that the pent-up demand in numerous economies, along with a
considerable reduction in inflation, will drive economic growth in 2023. The Federal
Reserve raised its benchmark interest rate to their highest in 15 year.
*Source: IMF World Economic Outlook, April 2023.
INDIAN ECONOMY:
Overview: Despite resilience amid slowing global growth, there are headwinds to Indias
growth in F.Y. 23-24. Recent financial sector turmoil in the US and Europe could reduce
appetite for emerging market assets, trigger another bout of capital flight and put
pressure on the Indian rupee. Tighter global financial conditions could also weigh on the
risk appetite for private investment in India. Notwithstanding external pressures, Indian
banks are well capitalized, and the impact of policy tightening on bank balance sheets has
been less severe in India due to the relatively modest pace of tightening. Moreover,
faster-than-expected inflation due to higher food or fuel prices may also weigh on
domestic demand.
These downside risks to growth could affect fiscal consolidation plans. The debt path
is highly sensitive to variation in nominal growth rates and further moderation in
economic growth could lead to an increase in the already high public debt-to-GDP ratio.
UNION BUDGET FY 2023-24:
The Budget 2022-23 sought to lay the foundation for the future of the Indian economy
through projects like PM Gati Shakti, Inclusive Development, Productivity Enhancement
& Investment, Sunrise Opportunities, Energy Transition and Climate Action, as well as
Financing of Investments.
The capital expenditure of the Indian government expanded 35.4% from ?5.54 lakh crore
to ?7.50 lakh crore. An outlay of ?5.25 lakh crore was made to the Ministry of Defence
(13.31% of the total Budget outlay). An announcement of nearly ?20,000 crore was made for
the PM Gati Shakti National Master Plan to catalyse the infrastructure sector. An
expansion of 25,000 km was initiated for the national highways network. An allocation of
?2.37 lakh crore was made towards the procurement of wheat and paddy under the MSP safety
net. An outlay of ?1.97 lakh crore was announced for Production Linked Incentive schemes
across 13 sectors.
GLOBAL & INDIAN BAKERY INDUSTRY OUTLOOK:
The global bakery products market size was USD 397.90 billion in 2020. The market is
projected to grow from USD 416.36 billion in 2021 to USD 590.54 billion by 2028, growing
at a CAGR of 5.12% during the forecast
period (2021-2028). Alongside these predictions, India occupies a unique position in
the bakery market and continues to grow.
FISCAL YEAR 2023 AND OUTLOOK
During the fiscal year ended 31st March 2023, your Company has achieved a total net
sale of Rs. 2553.44 lakhs and incurred loss of Rs. (62.90) lakhs. The Company has achieved
progressing EBITDA of Rs. 735.68 Lakhs in the FY 22-23 in comparison to EBITDA of Rs.
689.09 Lakhs in FY 21-22.
The Companys main revenue comes from selling of bakery, confectionery and ice cream
products through its outlets spread in the state of Gujarat. Further, the Company has its
manufacturing facility in Ahmedabad. Moreover, the Company has implemented
"Operatorship Model" through which independent and expertise operators will run
the Company outlets allocated to them. It enhance creativity in marketing of Company,
decrease recruitment expense and time of the Company and ultimately increase revenue.
During the year, The economy was beset by a multitude of challenges all through the
year. The Indian economy appears to be on track for a slow yet steady recovery from
COVID-induced challenges. However, the severe and sustained inflation in commodities, Raw
materials, due to supply disruptions export restrictions in producer nations, impacted the
economy and food companies severely.
Your Company was also affected by these developments and is addressing the twin
challenges of rising inflation and muted consumer demand through product innovation,
sustainable cost saving measures and calibrated price increases. These measures and the
innate strengths of its brands, human resources and technology interventions are expected
to be of significant support to the Company in expecting growth in a challenging
environment, the likes of which the world has not seen in a long time.
BUSINESS STRATEGY
Going forward our business strategy will rest on four pillars, the idea is to put in
place a proper framework to give us the best chance to grow in the face of challenges from
the competition and external events over which we may have no control. Each of tenets of
our strategy is explained below:
• Strengthen our core
• Exploit our expertise in western dessert products
• Offer newer formats
• Putting it all together
While strategies often look good on paper, what often separates successful ones from
the not-so-successful is their execution. Each of these pillars requires a proper
structure to ensure proper planning, execution and monitoring. Your Company will invest in
putting in place the right structure that ensures precise execution, the investment may
vary from say putting in place a business development team or resources and tools for
increasing the numbers of product development team and innovation team. While as mentioned
before that of this takes us in new directions, we feel that it essential for the company
to adjust, pivot and transform in order to best respond to emerging opportunities and
challenges. We are confident that with the team we have in place we are on track to
achieve our growth objectives.
OUR COMPETITIVE STRENGTHS
We derive our strengths from following factors:
1. Brand Name and Image
3. Skilled and Experienced staff/employee base
4. Expertise in western dessert products
5. Trade items portfolio in bucket Emerging Opportunities:
1. Indias strong consumption fundamentals
2. Acceptance of western dessert items in gifting
3. The third place i.e. a hangout place for all purpose for our customers
4. Diet trends Threats:
1. Shifts in customer tastes away from the Companys products
2. Emergence of substitute products.
3. Change in modus-operandi
4. The arrival of third party marketplaces
5. Unforeseen government regulation / Force Majeure conditions
6. Increased trade barriers KEY RISKS AND CONCERNS
The Company is exposed to business risks which may be internal as well as external and
the growth of our Industries is linked to the overall economic growth. Primary risk to the
business will be on account of adverse changes to the economy. Volatility in commodity
prices is the other significant risk.
FINANCIAL AND OPERATIONAL PERFORMANCE
The key standalone financial are as under:
(Rs. in Lakh)
| Particulars for the year ended |
March 31, 2023 |
March 31, 2022 |
| Revenue form Operation |
2553.44 |
2056.23 |
| Profit before Tax |
(62.18) |
(213.60) |
| Profit after tax |
(62.90) |
(120.26) |
DISCLOSURE OF KEY CHANGES IN FINANCIAL INDICATORS - KEY FINANCIAL RATIOS:
| Particular |
F.Y. ended March 31, 2023 |
F.Y. ended March 31, 2022 |
| Debtor Turnover Ratio (times) |
138.27 |
22.10 |
| Inventory Turnover Ratio (times) |
17.16 |
14.99 |
| Interest Coverage Ratio (times) |
0.77 |
0.30 |
| Current Ratio (times) |
0.26 |
0.23 |
| Debt Equity Ratio (times) |
0.83 |
1.70 |
| Operating Profit Margin (%) |
8.30 |
4.37 |
| Net Profit Margin (%) |
(2.33) |
(9.18) |
| Return on Networth (%) |
(3.63) |
(12.05) |
INTERNAL CONTROL SYSTEMS AND ADEQUACY
Your Companys Internal Control Systems are commensurate with the nature, size and
complexity of its business and ensure proper safeguarding of assets, maintaining proper
accounting records and providing reliable financial information.
The Directors have laid down internal financial controls to be followed by the Company
and such policies and procedures have been adopted by the Company for ensuring the orderly
and efficient conduct of its business, including adherence to Companys policies, the
safeguarding of its assets, the prevention and detection of frauds and errors, the
accuracy and completeness of the accounting records and the timely preparation of reliable
financial information.
Some Key Features of the Companys internal controls system are:
• The Company uses ERP system to record data for accounting, consolidation and
management information purposes and connects to different locations for efficient exchange
of information.
• Preparation & monitoring of Annual Budgets through monthly review for all
operating & service functions.
• Adequate documentation of Policies & Guidelines.
• The Company has a well-defined delegation of power with authority limits for
approving revenue & capex expenditure which is reviewed and suitably amended on an
annual basis.
• The Company has a compliance management system.
• Internal Audit is carried out in accordance with auditing standards to review
design effectiveness of internal control system & procedures to manage risks,
operation of monitoring control, compliance with relevant policies & procedure and
recommend improvement in processes and procedure.
The Audit Committee of the Board of Directors regularly reviews execution of Audit
Plan, the adequacy & effectiveness of internal audit systems, and monitors
implementation of internal audit recommendations including those relating to strengthening
of companys risk management policies & systems. Internal Audit provides assurance on
functioning and quality of internal controls along with adequacy and effectiveness through
periodic reporting.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
The industrial relations remained cordial throughout the year and we believe that our
employees are key contributors to our business success. We focus on attracting and
retaining the best possible talent. Our company looks for specific skill-sets, interests
and background that would be an asset for our business. Our business model comprises of
senior level executives, professionals, experienced, qualified and semi qualified
personnel. Our company has HR department which recruits and manages this division and
ensures that personnel required are made available in time, train them and make them ready
according to their job profile. The Company continued to make significant progress on
strengthening HR Processes and Practices to build organization for current as well as
future sustainability during the year.
Our Company work processes and skilled/ semi-skilled/ unskilled resources together with
our strong management team have enabled us to successfully implement our growth plans.
CAUTIONARY STATEMENT
Statements in this Management Discussion and Analysis describing the Companys
objectives, expectations or predictions may be forward looking within the meaning of
applicable 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 raw material availability and prices, cyclical demand and pricing in
the Companys principal markets, competitive actions, changes in Government regulations,
tax regimes, economic developments in India and in countries in which the Company conducts
business and other incidental factors.
Date: 02/09/2023 By Order of The Board
Place: Ahmedabad For, DANGEE DUMS LIMITED
Sd/-
NIKUL JAGDISHCHANDRA PATEL
CHAIRMAN & MANAGING DIRECTOR (DIN: 01339858)
+91-9892691696
