Gautam Exim Ltd Management Discussions.

Global Economic overview

Paper and pulp market has a rising demand for pulp and paper from various applications, such as paper manufacturing, printing, construction. Desirable properties exhibited by pulp and paper include processability, toughness, and stiffness. Currently, North America holds the highest market share of the paper and pulp market due to its growing requirement in the packaging and construction/consumer industry. According to the American Chemistry Council, the higher demand is resulting from larger amounts of new capacity being sold into the export markets as well as domestic sales that have grown at strong rates.

Domestic Overview

India is the 15th largest paper producer in the world. The domestic market / consumption of paper is over 16 million tons per annum (TPA), with over 2 million TPA being imported. By 2025-26. The revenue impact of covid-19 pandemic on the sales revenue of market leaders, market followers and disrupters in the report. The paper industry in India looks extremely positive as the demand for upstream market of paper products, like, tissue paper, tea bags, filter paper, light weight online coated paper, medical grade coated paper, etc., is growing up.

The wet strength papers, tea bag tissue, soft tissue, filter paper, insulation Kraft, extensible Kraft, decorative laminates, overlay tissue, thermal papers, digital papers, coated papers/boards and some specialties grades of paper are imported from USA, Europe, Dubai, and Singapore.

However, India exports A4 copies, wood free, MG varieties, coated duplex, and large quality of converted products like stationary items, calendars, books, magazines, childrens play books and comics grades of papers to Middle East, south eastern countries, Eastern Europe and USA.

Business background, Structure and Developments

Incorporated in 2005, The company is engaged in importing of waste paper, pulp and speciality chemicals, provides import trading, import aggregation and import facilitation services of industrial raw material, stores, spares etc to paper mills, chemical units and other manufacturing units. Import of these goods is majorly done from USA, UK Europe, Middle East and Australia.

The Company is promoted by Balasubramanian Raman and Nagalaxmi Balasubramanian since Incorporated. Balasubramanian Raman is a certified Management Consultant and is a member of Institute of Management Consultants of India. He heads Marketing and Finance Department of the Company. Mrs Nagalaxmi Balasubramanian holds a Bachelor of Science and Bachelor of Education Degrees from Banglore University and looks after the administration department of the Company.

Gautam Exim Ltd. (Formerly known as Gautam Enterprises) had been in this line of activity for over 24 years since 1997. Company is managed by professionally qualified promoter director & CEO Mr. R. Balasubramanian. Company enjoys extremely good credentials with all its suppliers abroad, its customers in India and its Bankers.

Opportunity and Threats Opportunities

Having consolidated its business in imports and import trading of waste paper the principal raw material to paper industry, company has tied up with paper mills to whom imported waste paper suppliers are made by the company, for distributorship and export of finished paper namely Kraft paper, writing & printing paper and news print.

The domestic as well as export demand for finished grades of paper has been good and company expects a sizable turnover in finished paper segments in the coming years due to increase in education centre, Growing literacy rates thereby substantially contributing to improvement of bottom line.

Threats

Paper Industry in general in India is subject to cyclical variation in demand & supply. Presently the industry enjoys good demand with the opening up of export market in the Middle East. Prices of imported waste paper are subject to fluctuation due to exchange rates, international freight rates and consequent international prices for waste paper.

Segment-wise or products-wise performance

During the year, your Company has earned revenue from trading business of Rs. 24765.73/- Lakhs. Further, the Company has made Net Profit after Tax of Rs 65.87/- Lakhs from trading business.

Outlook on Risk and concerns

Your Company is exposed to a number of risks such as economic, regulatory, taxation and environmental risks. Further, following can be some of the risks and concerns; the Company needs to keep in mind:

- the company is subject to foreign currency exchange rate fluctuations risk which could have a material and adverse effect on our results of operations and financial condition. - the top 5 customers constitutes more that Approx. 65% and contribute Approx. 85% of our revenue from operations for the last couple of years.

- Adverse fluctuations in the price and availability of recyclable paper fiber and pulp could increase input costs which affect the operations of the Company and thereby affect the profitability of the Company.

- We do the business with our customers on purchase order basis and do not have long-term contracts with most of them.

- We require high working capital for our smooth day to day operations of business and any discontinuance or our inability to acquire adequate working capital timely and on favourable terms at a future date may have an adverse effect on our operations, profitability and growth prospects.

- Increasing competition among the Indian Exporters in this industry.

Some of the risks that may arise in its normal course of its business and impact its ability for future developments include inter-alia, credit risk, liquidity risk, counterparty risk, regulatory risk, commodity inflation risk, currency fluctuation risk and market risk. Your Company has chosen business strategy of focusing on certain key products and geographical segments are also exposed to the overall economic and market conditions. Accordingly, your Company has established a framework and process to monitor the exposures to implement appropriate measures in a timely and effective manner.

Internal Control System and their adequacy

The Company has adequate internal control systems including suitable monitoring procedures commensurate with its size and the nature of the business. The Internal Auditors and Companys Internal Audit Department conduct regular audits to ensure adequacy of internal control system, adherence to management instruction and compliance with laws and regulations of the country as well as to suggest improvements. The statutory auditors while conducting the statutory audit, review and evaluate the internal controls and their observations are discussed with the Audit committee of the Board.

Discussion on financial performance with respect to operational performance

The country witnessed lockdown being implemented in the second forthnight of March, 2020. Our Company has taken all safety precautions as per guidelines from the Government. During the period the Net Income of your Company for the year 2020-21 was decreased to Rs. 25046.81/- Lakhs as against Rs. 35309.60/- Lakhs of the previous year. Accordingly, the Company has made a Net Profit after Tax of Rs 65.87/- Lakhs in the current year as against Rs 67.10/- Lakhs of the previous year.

Human Resources

One of the key pillars of the Companys business is its people. The Company considers human resources as one of the vital and important factors for sustained growth, business success and creating value for Stakeholders. Company has maintained cordial and harmonious relations with all Employees. The total numbers of Employees were 11 as on 31st March, 2021.

Cautionary Statement

Certain statements made in the Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, predictions and expectations may be forward looking statements, within the meaning of applicable securities law and regulations and actual results may differ materially from those expressed or implied. Significant factors that make differences to Companys operations include competition, change in Government policies and regulations, tax regimes and economic development within India. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statement, on the basis of any subsequent development, information or events or otherwise.

By order of the Board of Directors
BALASUBRAMANIAN RAMAN
Managing Director
DIN: 00410443

COMMITTEES OF THE BOARD

The Board of Directors has constituted four Committees, viz.

1. Audit Committee

2. Nomination and Remuneration Committee 3. Stakeholders Relationship Committee

AUDIT COMMITTEE

The Audit Committees composition meets with the requirement of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement and Regulation 18 of the "SEBI LODR "Regulations 2015. The Members of the Audit Committee possesses financial / accounting expertise / exposure. The Audit Committee comprised of 3 members as on 31st March, 2021. The company secretary is the secretary and Compliance officer of the committee. The detail of the composition of the Audit committee along with their meetings held/attended is as follows:

Name of the Position Member Status Attendance at the Committee Meeting held on
25/06/2020 29/08/2020 11/11/2020 09/02/2021
Umakant Chairman/ Kashinath Bijapur Member Non-Executive Independent Director Yes Yes Yes Yes
Shivkumar Member Janakiram Giddu Non-Executive Independent Director Yes Yes Yes Yes
Balasubramanian Member Raman Executive Director Yes Yes Yes Yes

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committees Composition meets with the requirement of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement and Regulation 19 of the "SEBI LODR "Regulations" 2015. The Members of the Nomination committee possesses sound knowledge / expertise / exposure. The Committee comprised of 3 members as on 31st March, 2021. The company secretary is the secretary and compliance officer of the committee .The detail of the composition of the Nomination & Remuneration committee along with their meetings held/attended is as follows:

Name of the Member Position Status Attendance at Meeting held on 29/08/2020 the Committee 09/02/2021
Shivkumar Janakiram Giddu Chairman/Me mber Non-Executive Director Independent Yes Yes
Umakant Kashinath Bijapur Member Non-Executive Director Independent Yes Yes
Balasubramanian Raman Member Executive Director Yes Yes

STAKEHOLDERS RELATIONSHIP COMMITTEE

The stakeholders Relationship Committee meets with the requirement of the section 178 of the Companies act 2013, and regulation 20 of the SEBI LODR "Regulations" 2015. The Stakeholders Relationship Committee is mainly responsible to review all grievances connected with the Companys transfer of securities and redressal of shareholders / investors / security holders complaints .The Committee comprised of 3 members as on 31st March, 2021. The company secretary is the secretary and compliance officer of the committee. The detail of the composition of the said committee is as follows:

Name of the Member Position Status
Umakant Kashinath Bijapur Chairman/Member Non-Executive Independent Director
Shivkumar Janakiram Giddu Member Non-Executive Independent Director
Balasubramanian Raman Member Executive Director

During the Financial Year 2020-21, No stakeholders Relationship Committee meeting were held.

During the year, the Company has not received any complaints from the Shareholders of the Company. There were no outstanding complaints as on 31st March, 2021

By Order of the Board of Directors
BALASUBRAMANIAN RAMAN
Managing Director
DIN: 00410443