Datiware Maritime Infra Ltd Management Discussions.

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 by 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.

1) Industry Structure and Developments

Indian fisheries and aquaculture is an important sector of food production providing nutritional security, besides livelihood support and gainful employment to more than 14 million people, and contributing to agricultural exports. With diverse resources ranging from deep seas to lakes in the mountains and more than 10% of the global biodiversity in terms of fish and shellfish species, the country has shown continuous and sustained increments in fish production since independence.

India is the 20th largest maritime country in the world. Its strategic location of a long coastline that flanks important global shipping routes, makes it a major maritime nation. The maritime sector in India comprises of ports, shipping, shipbuilding and ship repair as well as inland water transport systems. About 95% of the countrys trade by volume and 70% by value is moved through maritime transport. With Indias current share in global merchandise trade at around 0.80%, a sound maritime infrastructure plays an important role in the pace, structure and pattern of our economic development.

2) Opportunities and Threats -

The global sea food consumption is increasing as Sea food is rich in nutrition and is a healthy food compared of other forms of meat. As per GOAL report the wild caught sea food is declining year after year necessitating the increase in farmed sea food. With long coast line, India is ideally suited for development of seafood industry. A planned development would provide abundant opportunities for seafood industry.

The aqua culture activity is dependent on climatic conditions prevailing during season to season, which is unpredictable. Natural calamities like floods, cyclones, during the culture season can have serious impact on the prospects of successful culture. Inspite of technical advancement and development of Specific Pathogen Free (SPF) seed, the possibilities of the shrimps getting affected by virus and diseases cannot be ruled out.

So far as Shipyard activity is concerned Indian Navy, Coast Guard and other maritime security agencies have embarked on an ambitious expansion programme which will open new opportunities. Distress pricing policies of competitors and rising labour cost are threats to shipyard activity.

3) Segment-wise or product-wise performance -

Particulars ( Rs. in Lakhs) 31.03.2020
1. Segment Revenue
(a) (Fishery) 57.58
(b) (Shipyard) 21.18
Total 78.76
2. Segment Results (Profit)(+)/ Loss (-)
(a) (Fishery) 11.97
(b) (Shipyard) (33.31)
Total (21.34)
3. Net Capital Employed
(a) (Fishery) 25.01
(b) (Shipyard) 44.72
(c) Unallocated 93.62
Total 163.35

4) Outlook - During the year under review the company has not earned any income. However, post takeover of company by the present promoters, the company is taking continuous efforts to commence business. As a result of that Company has received on June 2, 2019 Work Order for fabrication and assembly of floating gates of Drydocks worth Rs 1500 Lakhs. Present Board of Directors has good reputation as well as experience in maritime infrastructure. Their endeavor to enter into maritime infrastructure industry will help the company to procure as well as execute good scales of order thereby increasing financials of the company.

So far as aquaculture business is concerned Company has taken loan of 1.00 cr to restart aquaculture activities. Loan has been utilized to revamp 12 Nos of ponds, deepen water channel, get a 250kva electricity connection, building pond gates, new cabling and electric panels, labour rooms and purchase of capital equipment like aerators, and pumps.

5) Risks and concerns - Change in government policies and rising labour cost can have adverse effect the business of the company.

6) Internal control systems and their adequacy - The Companys Internal Financial Controls encompass policies and procedures adopted by the Board for ensuring the orderly and efficient conduct of business, including adherence to its policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of accounting records and the timely preparation of reliable financial information. Appropriate review and control mechanisms are built in place to ensure that such control systems are adequate and are operating effectively.

The systems/frameworks include proper delegation of authority, operating philosophies, policies and procedures, effective IT systems aligned to business requirements, an Internal Audit framework, a comprehensive Code of Conduct & Business Ethics framework, a Risk Management framework and adequate segregation of duties to ensure an acceptable level of risk. Documented Standard Operating Procedures are in place for all business processes. Key controls are tested to assure that these are operating effectively.

7) Discussion on financial performance with respect to operational performance - During the year under review (2019-20) the company has earned Total Income of Rs. 78.76 Lakhs as against NIL in previous year. Further Company has incurred net loss of Rs. 21.34 Lakhs as against loss of Rs. 17.96 Lakhs.

Present Board of Directors has good reputation as well as experience in maritime infrastructure. Their endeavor to enter into maritime infrastructure industry will help the company to procure as well as execute good scales of order thereby increasing financials of the company. Previous Year Company got work order of fabrication and assembly of floating gates of Drydocks worth Rs 1500 Lakhs which is expected to be completed in the financial year 2020-21.

So far as aquaculture business is concerned Company had taken loan of 1.00 Cr. to restart aquaculture activities. Loan was utilized to revamp 12 Numbers of ponds, deepen water channel, to purchase a 250kva electricity connection, building pond gates, new cabling and electric panels, labour rooms and purchase of capital equipment like aerators, and pumps. This Loan was fully repaid during the period under review. Further the company has availed CC facility of 96.00 to meet its working capital requirement. Additionally bank has extended Rs. 6.00 Lakh as Covid 19 benefit credit facility.

8) Developments in Human Resources / Industrial relations - Aquaculture and shipyard business needs qualified and trained staff for these operations. In this direction, the Company imparts expert training in the respective field and develops Human Resource capabilities. During the year under review the Company employed 4 persons and the total number of employees as on 31.03.2020 is 7 employees. Once operations begin adequate manpower will be employed.

9) Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations, therefore, including:

Particulars 2019-20 2018-19
i. Debtors Turnover NIL NIL
ii. Inventory Turnover 0.85 NIL
iii. Interest Coverage Ratio -2.18 -21.27
iv. Current Ratio 0.47 0.23
v. Debt Equity Ratio 2.94 0.15
i. Operating Profit Margin (%) 12.00% NIL
ii. Net Profit Margin (%) -27.00% NA

There were no sales in previous year. Since this is the first year sales has happened there is huge difference between ratios.

10) Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof : In view of the losses there has been no returns on net worth

11) Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be forward looking statements within the meaning of applicable laws and regulations. There is no certainty that these forward looking statements will be realized, although care has been taken in making these assumptions. There are no obligation to publicly update any forward looking statements, whether as a result of new information, future events or otherwise.

DATIWARE MARITIME INFRA LIMITED

Jayashree Patil Ashok Patil
Managing Director Director
(DIN 02419826) (DIN 00766354)
Place: Pune
Date: September 1, 2020