danube industries ltd Management discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

In 2021, a year and a half since the start of the COVID-19 pandemic, the world economy moved towards its most resilient post-recession rebound in 80 years. That said, the global economy stepped into 2022 at a weaker position than projected as the new COVID-19 variant Omicron that spread across countries was said to be more transmissible than the Delta variant albeit with less severe symptoms. As the pandemic raged, the trading of goods by different means increases. Due to various measures and the incentives announcement by the Government, the business operations have started to be normalized. The Government has announced various short- term, medium-term and long-term measures related to direct investments, production linked incentives etc. After the restoration of movement of goods in a phased manner, the economy has seen revival and the trading of goods has seen revival in the demand.

ABOUT THE COMPANY

DANUBE has become one of the fastest growing IT hardware suppliers specializes in the area of Laptops, Gaming, Home Entertainment, Corporate, and School PCs and equipment. Our dedication to providing our customers the most detailed pre-sale product information, and unbeaten after-sales services with our extensive product knowledge, sets us apart from the competitors in the market. Whatever your requirements, buying directly from DANUBE enables you to obtain a higher specified PC and components for less. All our systems are built to order, delivering the latest components, directly tailored to your needs. The new website is packed with great information and ideas on leading-edge technologies right for you. You will find a fantastic range of great value offers on every component and part required for your next PC upgrades. Online orders are available to be picked up from our warehouse in Ahmedabad, or book a consultation with our staff to troubleshoot your old PC or discuss building the PC of your dreams! Our friendly staff is also available to answer all your PC related questions via LiveChat and email. Our goal is to be your quickest and friendliest supplier DANUBE has its own warehouse and soon launching our own manufactured products to stock goods onsite for fast and efficient delivery. We want to make your shopping experience as easy as possible, with a credit card, deposit, or cheque/money order payment and complete online order management, real-time help, and shipment tracking available online.

OPPORTUNITIES AND THREATS

With the financial reforms likely to add impetus to industry growth and likelihood of stable political environment, the domestic market should pose better opportunities in terms of volume growth. lmproved financial liquidity in the economy as a whole would be a key concern for the company to achieve higher volumes coupled with improved margins.

OUTLOOK:

The profit margins in the industry are under pressure. However, the Company has taken remedial measures. The Company is confident to meet the challenges with its strength in marketing network, its strategic planning, improvement and cost reduction exercise. With gradual acceptance of the GST and other measures, the confidence in the market is growing and the Company is poised to take advantage of improving market conditions.

RISK AND CONCERN

Apart from the high competitiveness in the business of trading of goods, the industry is facing some critical issues and their resultant effect on the long-term perceptive, there are various factors which may pose a challenge for the Company in the sector of the Company.

INTERNAL CONTROL SYSTEMS

The Company has adequate internal control procedures commensurate with the size and business operations of the company and nature of its business. The internal control system is continuously reviewed by the management to ensure orderly and efficient conduct of business. The system emphasis on the functions of purchase, sales, finance etc. to adhere to the well defined corporate policies.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Company has recorded total sales of Rs. 691038.99 Thousand as compared to Rs. 387149.24 Thousand in the previous financial year. The Profit before tax for the period under review is Rs. 10822.48 Thousand as compared to Rs. 12362.60 Thousand in the previous financial year. The Profit after tax during the year under review is Rs. 7577.04 Thousand Lakhs as compared to Rs. 9909.87 Thousand in the previous financial year.

HUMAN RESOURCES

The Company continued to have cordial and harmonious relations with its employees during the year under review. The Company is taking effective steps for the developments of human resources in various fronts.

Financial Ratios

Particulars	As at 31-3- 2023	As at 31-3-2022	% Variance
Current Ratio	1.24	1.99	-37.83%
Debt-Equity Ratio	1.25	0.10	1149.67%
Debt Service Coverage Ratio	4.25	370.72	-98.85%
Return on equity ratio	5.03%	10.64%	-5.61%
Inventory Turnover Ratio	11.41	12.85	-11.19%
Trade Receivables Turnover Ratio	3.75	1.88	100.11%
Trade payables Turnover Ratio	4.77	1.96	143.81%
Net Capital Turnover Ratio	7.10	5.70	24.52%
Net Profit Ratio	1.10%	2.56%	-1.46%
Return on Capital Employed	4.12%	7.67%	-3.55%

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report containing the objectives, expectations or predictions of the company may be forward-looking within the meaning of securities laws and regulations. Actual results may differ materially from those expressed in the statement. The operations of the Company could be influenced by various factors such as domestic and global demand and supply conditions affecting sales volumes and selling prices of finished goods, input availability and cost, Eovernment regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.