gulshan polyols ltd share price Management discussions


1.1 Overview on Economic and Business Environment: Global Economy and Outlook

Global growth is estimated at 6.1% in 2021 as per the International Monetary Fund compared to the contraction of 3.1% in 2020 mainly owing to the pandemic (World Economic outlook April 2022). The year 2021 saw economic recovery aided by supportive fiscal policy globally; however, the momentum slowed due to various factors, including subsequent Covid-19 waves (Delta and Omicron variant in Q2 and Q4, respectively), lower vaccine access in developing economies (leading to divergence in rate of recovery) and inflation with the increase in demand, supply disruptions and increase in prices (energy, freight and food). Global economic growth is projected at 3.6% in 2022 after a strong bounce back in 2021. The outlook is mixed with reopening of economies supporting greater demand coupled with challenges of Eastern Europe conflict having direct and global spillovers through commodity markets. In addition, there is the continued impact of lockdowns with new bottlenecks in global supply chains. Infiation is expected to remain elevated for longer period driven by commodity price increases and broadening price pressures. For Calendar Year (‘CY?) 2022, inflation is projected at 5.7% in advanced economies and 8.7% in emerging markets and developing economies. We will also see the tightening of monetary policies by various central banks to stabilise inflation, with the US Federal Reserve announcing its intentions to further raise rates and taper asset purchases at a faster pace in 2022. The International Monetary Fund added that the entire global economy would feel the effects with slower growth and faster inflation.

Energy prices have recorded unprecedented increase especially natural gas prices in Europe which rose sharply above baseline in 2022. Growth in the United States (‘US?) is expected to be 3.7% in CY 2022, moderating to 2.3% in CY 2023 due to faster withdrawal of monetary support as policy tightens to rein in inflation. The European Union (‘EU?) and the United Kingdom (‘UK?) economies are expected to grow by 2.8% and 1.2% respectively in CY 2022. Geopolitical tensions as a result of the Ukraine-Russia war and economic sanctions imposed on Russia are expected to dampen the above outlook (Russia supplies ~10% of the world?s energy). These developments have further elevated inflation and are likely to result in aggressive tightening policies by banks and a decline in private demand. There is a higher risk to growth with prolonged conflict. Among the Emerging Market and Developing Economies (‘EMDE?), China is expected to grow by 4.4% in CY 2022. India is expected to grow at the rate of 8.2% for CY 2022 and 6.9% in CY 2023. Growth is forecasted to be 4.6% in Middle East & Central Asia while 3.8% in Sub-Saharan Africa region for CY 2022.

Source: IMF World Economic Outlook April 2022

Indian Economy

India?s Gross Domestic Product (‘GDP?) growth is estimated to be 8.2% for CY 2022 as against the real GDP growth rate of 8.9% in CY 2021, the highest among large economies, reflecting a strong recovery led by favourable monetary and fiscal policy, mass vaccinations and significant progress on structural reforms. This growth is despite the impact of higher oil and commodity prices weighing on private consumption and investment. COVID-19 vaccination has played a critical role in minimizing loss of lives, boosting confidence in the economy towards resumption of activity and containing the sequential decline in output. 96% of the adult population has been inoculated with the first dose, while 82% of the adult population and over 3.4 crore children in the 15 to 18 year age group are fully vaccinated. Vaccination drive has further been extended to the age group from 12 years which has further boosted people?s confidence of returning to normal. In India, Consumer Price Index (‘CPI?) inflation had moderated to 5.2% in FY 2021-22 (April-December) from 6.6% in the corresponding period of FY 2020-21 but has edged upto 6.1% as recorded in February 2022. Energy and food prices are major contributing factors to headline inflation. Risks are tilted to the upside amidst sanctions from the West and raw material shortages. Exports registered a growth of 25% on a y-o-y basis. Export growth was broad-based, with ten major commodity groups accounting for around 80% of exports of the expansion above pre-COVID level. The improvement in export performance stemmed from higher value of shipments of engineering goods, petroleum products and chemicals. High import demand was driven by higher demand for petroleum products, electronic goods and gold. Import growth was broad-based, with major commodity groups accounting for more than 75% of imports recording an expansion above their pre-COVID levels. Crude imports increased by 41.7% in February 2022 over COVID levels, reflecting the rise in crude oil prices.

Source: IMF World Economic Outlook April 2022, State of the Economy RBI Bulletin-March 2022.

1.2 Industry Overview Global Chemical Industry

The global chemical industry outlook in 2022 is expected to be cautiously optimistic. The industry grew ~6% in FY 2021-22 driven by strong demand recovery post pandemic and gradual easing of supply chains towards the end of the year. In 2022, the industry faces pressure from rising inflation (increase in energy and raw material cost), supply chain disruptions, ongoing geopolitical tensions and conflict in Europe. While risks to the global economy remains, the global chemical industry is expected to grow in 2022 mainly led by Asia and America. Brazil, China, India and South-East Asian countries (‘SEA?) will emerge as the fastest-growing markets due to the rise in pent-up demand. The US Chemical Industry will continue to recover following the pandemic recovery and supply chain recovery. The European Chemical Council estimates that the output will slow down due to sharp rise in energy prices and continued supply chain disruptions, caused by sanctions. The Association of the German Chemical Industry (VCI) forecasts that in 2022 production of chemicals (excluding pharmaceuticals) in Germany will increase by 1.5%. The output growth of Chemical Industry is mainly supported by the continued recovery of the global economy and rising demand in downstream sectors. Most forecasts note that the expected recovery in the automotive industry, along with growth in the agriculture, construction, daily consumables, consumer durables and health and nutrition sectors, should underpin global chemical demand. A key feature of the global chemicals market is the shifting nature of its value streams, driven by demand for new products in a range of industries i.e. materials for microelectronics, advanced materials for construction applications, recycling technologies, solar applications and new solvent cleaning technologies. Most of the sub sectors are expected to grow in 2022 with Agrochemicals at ~2.3%, Consumer Chemicals ~3%, Inorganic Chemicals ~3.9%, Bulk Petrochemicals and Organic Chemicals ~3.8% and Specialty Chemicals at ~4%.

Source: American Chemical Council, European Chemical Industry Council, Association of German Chemical Industry, Various Industry Reports.

Key Global Trends

Sustainability has increasingly and become a focus for the chemical industry and many companies are responding with shift to green chemistry and commitments to decarbonisation, recycling and resource recovery. Large companies are leading the way to net-zero greenhouse gas emission commitments. Initiatives such as European plastic tax and green hydrogen stimulus packages in the US, Canada and Europe are accelerating the adoption of sustainable practices and goals. Industry players are showing heightened focus on new and innovative technologies such as Carbon Capture and Utilisation (CCU). In addition, companies continue to advance work on chemical recycling, green hydrogen, etc. These will boost usage of renewables, improve energy efficiency, reduce emissions and create new market for carbon and other by-products as part of an increasingly circular economy. Digital technologies will support the global chemical industry transformation. Chemical companies are exploring the potential of advanced data analytics, automation, connectivity and digital technologies to become more agile, innovative, responsive and efficient. Advances in sensors, cognitive computing and analytics present economically viable solutions for extracting more efficiencies and preventing production failures. The changing composition and expectations of hyper connected consumers and Government policies will trigger structural industry and consumption shifts towards investment in clean technology. There?s a clear upward trend driven by public policies promoting environment friendly technologies. Large number of start-ups were launched with investments in hydrogen as a viable fuel for the industries and processes that need fuel other than electricity. Chemical companies are likely to focus on repositioning their asset portfolios and balancing trade-oRs.s between different strategic options with critical considerations such as scale, the scope of products and growth opportunities. To deliver strong growth and improve financial performance; firms may consider looking into few activities like investment in high value-added opportunities, consumer preference, etc.

Source: Various industry reports (Deloitte Chemical Industry Outlook 2022, C&EN World Chemical Outlook, etc.)

Indian Chemical Industry

While the Indian chemical industry was adversely affected due to COVID-19 in the first half of CY 2020, demand recovery was seen in CY 2021 and the trend is expected to continue through CY 2022. However, uncertainties exist due to rising costs of energy, unavailability of raw material on account of supply chain disruption and other inflationary pressures by virtue of continued pandemic and recent geopolitical conflict in Europe. The Indian chemical industry makes up ~3.4% of the global chemicals industry and is expected to grow to US$ 300 billion by 2025. The domestic chemicals sector is expected to showcase high revenue and volume growth in FY 2022-23, owing to an improvement in domestic demand, increased Government spending and better price realisation of chemicals. Bulk chemicals (Basic Chemistry) constitute 25% of the market, while Specialty chemicals, Petrochemicals, and Agrochemicals have 21%, 19% and 15% of the market, respectively. Biotech and pharmaceuticals (including active pharmaceutical ingredients and others) together constitute 20% of the market. Specialty chemicals market is expected to increase at a Compound Annual Growth Rate (‘CAGR?) of 12% to US$ 64 billion by 2025. Specialty chemical companies are seeking import substitutions while exploring export opportunities to accelerate their businesses. India is the 4th largest producer of agrochemicals globally. The agrochemicals market in India is expected to register 8.6% CAGR to reach US$ 7.4 billion between 2021 and 2026. From April 2021 to February 2022, exports of organic & inorganic chemicals* increased 15% y-o-y to reach US$ 38.53 billion. Imports of organic and inorganic chemicals aggregated US$ 82.68 billion up 52% y-o-y. Nearly 25% of India?s imports of chemicals are contributed by China.

Growth opportunities are largely driven by specialty segment due to rise in demand from end-user industries such as food processing, personal care and home care. Supply disruption has caused the global end-user industries to diversify their vendor base including Indian players. Closure of plants in the EU and China due to increasing environmental concerns have favoured Indian manufacturers to invest further in specialty chemicals. The Indian Government aims to boost manufacturing share in GDP to 20% by 2025. The dedicated integrated manufacturing hubs under Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR) Policy has the ability to attract an investment of Rs. 20 Lakh Crore (US$ 276.46 billion) by 2035. The Government plans on production-linked incentive (PLI) schemes to promote domestic manufacturing of agrochemicals, advanced cell batteries, etc. An added advantage of skilled and low-cost labour, world-class engineering and strong R&D set-up has the potential to further boost growth.

Source: Various reports – IBEF Chemicals Industry Report February 2022, India: Global Chemicals & Petrochemicals Manufacturing Hub Report by Department of Chemicals & Petrochemicals, November 2021.

1.3. Company overview and recent developments:

Gulshan Polyols Limited (GPL or Gulshan or the Company) is a multi-location, multi product manufacturing company and is a leading manufacturer of grain and mineral based specialty chemical in India with global presence in 42+ countries, across 3 continents. GPL is an industrial house, older, more than four decades, engaged in manufacturing of specialty chemicals from grain and minerals, from multiple facilities set up across India. The roots of the Company was incorporated by Promoters in the year 1981 as Gulshan Sugars & Chemicals Limited (GSCL) with primary business of manufacturing Calcium Carbonate at MuzaRs.arnagar, with an initial capacity of 2100 MTPA. Over the years, in 2000, GSCL was demerged into three companies and GPL is one of them, incorporated as a public limited company and registered in October 2000. Since inception, GPL is a dividend paying company and listed on Stock Exchanges. In March 26, 2022 and January 28, 2015, your Company was listed on Bombay Stock Exchange (BSE) and National Stock Exchange of India Ltd. (NSE) respectively.

Its business portfolio covers Sorbitol, Fructose & Sweetener, Starch, Ethanol, Calcium Carbonate, Ethyl Neutral Alcohol, Agro based Animal Feed and its by Products. On- Site PCC plants on multiple production facilities/locations at MuzaRs.arnagar in Uttar Pradesh, Bharuch in Gujarat, Chhindwara in Madhya Pradesh, Dhaula Kuan in Himachal Pradesh, Abu Road in Rajasthan, Patiala in Punjab, Tribeni in West Bengal, Amlai in Madhya Pradesh, Golpara, Assam.

From toothpaste to alcohol, from sweeteners to paints, from paper to medicines, from plastics to personal care items, GPL is touching and an integral part of everyones? everyday life, across the world.

Gulshan provides the know-how to set up an On-site PCC plant and maintains the supply of the raw materials for the same. After success of its first partnership in this field, it is tying knot with other paper mills for On-site PCC technology.

GPL is one of the largest players in the mineral processing & grain processing segments in India. It is a market leader with a substantial market share in the respective segments. More than four decades of experience, large capacity, strong clientele and consistent performance place GPL in the pole position.

The Company caters to wide range of industry & niche markets in core sector encompassing pharmaceuticals, personal care products, footwear, tyres, rubber & plastics, paints, alcohol, value added paper, agrochemicals, food and agro products, ethanol etc. Gulshan has an impressive clientele comprising of the nation?s top FMCG?s, leading paint manufactures and many reputed brands. Gulshan was recognized by Government of India as Star Export House since year 2016, for consistent export of products to various parts of the world. Gulshan caters the top notch 500 fortunate Companies.

The COVID-19 pandemic has posed significant unforeseen challenges for all businesses, including GULSHAN POLYOLS LIMITED. However, we driven by the dedication of our employees and the trust of our customers, we have grown and growing ahead at the fastest pace ever in a decade, constantly.


The company has three manufacturing segments viz Mineral Processing, Grain Processing & Ethanol (Bio-Fuel)/Distillery. The products processed under these segments, are having end use in multiple industries.


Starch Sugars Business: It includes Sorbitol-70% solution, Liquid Glucose, Native Starch, Fructose Syrup, and Rice Syrup Solids. Having facilities with a combined capacity of 1,81,800 MTPA for producing starch sugars and for Sorbitol with capacity of 72,000 MTPA with leading market share.

The Rice-based Grain Processing Plant at MuzaRs.arnagar, has achieved optimum level of capacity utilization and was the main growth driver and will remain the same in the future also.

Native Starch/ Maize Starch: It is the main carbohydrate nutrient from different sources of vegetation. Maize or corn starch powder is white, odorless and tasteless, which is extracted from kernel of maize/ corn. It is widely used as a thickener and a stiRs.ening agent with numerous industrial applications. Maize starch is the second major product after sorbitol, is used by the semi kraft paper industry for making corrugated boxes (demand supported by e-commerce boom). The company?s plant is situated in and around the paper belt in MuzaRs.arnagar which gives us strategic locational advantage.

Fructose Syrup which is naturally found in fruits, corn syrup and molasses. Commercially, Fructose Syrup is used as a sweetener in Rs.avored and unRs.avored syrups, energy drinks, processed food, bakery products. It is serving the food and beverage industry is showing a very high growth rate.

Rice Syrup Solids which is also known as dried glucose syrup or Glucose Powder. It is usually used as sweetener and stabilizers for moisture & texture in baked goods, confectionary (hard candy), dairy products, processed meats, seafood and also used by breweries to lighten beer color, add body, rice Rs.avor and fermentable sugars. It is easily dispersed into water for ease of use in quick dissolving beverage mixes. Agro based Animal Feed business is India?s feed industry is growing with poultry, cattle and aqua feed sectors emerging as major growth drivers. The demand for animal protein and dairy products in India will increase the compound feed consumption volumes. Consequently, cattle need to be developed, more requirement of nutritious food for them, which implies higher demand of grain by-products.

Company has grain processing units in Bharuch, Gujarat and MuzaRs.arnagar, Uttar Pradesh. Currently grain processing is the main revenue generator for the company with the contribution of 75% (approx.) to the total revenue among segments.

Company is focusing on Green Energy


Calcium Carbonate business: Your Company also produces over 19 grades of Calcium Carbonate (Precipitated, Activated, Wet and Ground Natural Calcite Powder) used in various industries. The Company has four integrated facilities to manufacture Calcium Carbonate spread across the country.

In the Company?s endeavor to add new products delivering value addition, the company is gradually shifting its focus from producing lower grade products to higher grade products which will increase the overall profitability of the Company in medium to long term perspective. Company has mineral processing units in MuzaRs.arnagar, Uttar Pradesh, Dhaula Kuan in Himachal Pradesh and Abu Road in Rajasthan. Onsite PCC/WGCC Plants: The Company is ‘FIRST? in the country to introduce the concept of On-site PCC manufacturing plant for Value Added Paper (VAP) industries. Company?s achievement has been recorded in the Limca Book of Records in 2010. The Company has successfully installed Seven Onsite PCC plants for Paper Industry Companies.

Company provides the raw materials and expertise to set up and maintain an on-site PCC plant. This reduces energy consumption and drying time for users. Company has Onsite PCC plants in West Bengal, Uttar Pradesh, Punjab and Madhya Pradesh.

The Management hopes for the exponential growth in this segment in the country, in line with the developed nations, where on-site PCC has become an integral part of Value-Added Paper such as printing, photo copier, tissue paper and writing paper.

Your company is the only Indian company which is offering such technology & providing plants to Indian and overseas companies engaged in manufacturing Value Added Paper.


Ethanol (Bio-Fuel): Company is successfully supplying Ethanol to BPCL, HPCL and other Oil Marketing Companies (OMCs), Reliance and Nyara Energy for Ethanol Blending Petroleum Program and Company is working at more than 100% capacity utilization.Company has entered into 10 years? long ofitake agreement with OMCs for more than 50% of capacity.

The Company is planning to expand its footprints in Ethanol production segment and has embarked on a significant capex plan for manufacturing ethanol using damaged food grains.

Company has Ethanol Production Units in Chhindwara, Borgaon, Madhya Pradesh and Golpara, Assam (in the process of setting up). Country Liquor: The Company has awarded a tender for manufacturing and selling of Country Liquor in the state of Madhya Pradesh.

Segment wise Revenue & Profits for the year ended March 31, 2022

Segments Revenue for the year ended 31st March

Profits before Interest and Tax for the year ended 31st March

2022 2021 2022 2021
Mineral Processing 9,409.62 9,237.46 1,278.55 1,729.13
Grain Processing 80,915.33 54,080.63 8,140.83 6,631.03
Ethanol (Bio-Fuel)/Distillery 19,729.30 13,269.60 2,453.27 1,579.25
Unallocated 18.38 15.75 102.96 107.72
Total 1,10,072.64 76,603.44 11,975.61 IGHT?>10,047.13


Manufacturing has emerged as one of the highest growth sectors in India. Prime Minister of India, Mr. Narendra Modi, had launched the ?Make in India? program to place India on the world map as a manufacturing hub and give global recognition to the Indian economy. Further, the Indian Government recognises chemical industry as a key growth element and forecast to increase share of the chemical sector to ~25% of the GDP in the manufacturing sector by 2025. Under the Union Budget 2021-22, the Government allocated Rs. 233.14 crore (US$ 32.2 million) to the Department of Chemicals and Petrochemicals.

In this current scenario, Higher energy costs is the most significant risk to our business performance. The Company continues to remain focused towards keeping fixed costs low and controlling variable costs including grain, fuel, coal, lime stone and other raw materials? costs and continuous improvement programs to help mitigate the adverse impact of these risks including working on changing fuel mix and different contracting strategies.

Adherence to more stringent environmental norms, packaging and improving safety performance in a sustainable manner are other key areas that the Company continues to focus on during FY 2022-23.

Our strengths revolve around our penchant for innovation and consistent product development with the aim of creating a clear differentiation from competition, our strong passion for sustainability and the circular economy, our thought leadership in creating intellectual property and our ability to collaborate with multiple agencies to realize our four-pillar strategy.


The outlook for the Company for the coming years continues to be positive. Most of the customers have indicated robust growth plans which augurs well for the growth of the Company. Your company?s focus has always been on expanding its business horizons in the bioeconomy by leveraging its technology led innovative solutions.

Further, as the chemical industry moves into 2022, strong demand for both commodity and specialty chemicals should keep demand robust throughout the year. The industry shall also experience increased capital expenditure as leading industry players focus on building capacity and expanding into growing end markets through both organic and inorganic routes. However, the industry could face margin pressures amid raw material cost inflation, which will likely remain high through the first half of 2022.

The global trade tensions, fast inflation, hike in energy, fuel and raw material prices, credit squeeze in global and domestic market have played a major role in driving down profit margins and growth expectations. Just when the markets were recovering from Covid, an unprecedented geopolitical tensions in form of Ukrain-Russia war, affecting the world?s supply chain disruptions. This may lead to fundamental shifts in consumer behavior in future and present new opportunities and threats to businesses. Your Company expects to face this situation by harnessing the intrinsic strengths of its brands, innovation capabilities, strong distribution network and cost efficiency programs. Your Company is well positioned with its strong management team, technology interventions and robust processes to address any changes that may emerge due to COVID-19 and during this global tensions and fast inflation. Indeed, your Company has marked eRs.ervescent growth and achieved many milestones throughout the year in FY 2021-22. Though, Company is impacted by the constant fluctuations in commodity and fuel prices. But, it is your Company?s endeavor to source the right material, that is of high quality and constantly keep track of emerging costs to take corrective action at the right time.

The company has successfully commenced and fueled up the commercial production of Ethanol and started supplies to BPCL and HPCL. Going forward ‘Make in India? strategy of Government of India on ‘Ethanol Blending Petroleum Program? on petrol blending with Ethanol upto 20% by 2023 (previously it was upto 2025), the Management is very much passionate about future outlook of Ethanol Business, so it is exploring new locations and avenues. Whereas, the Company has successfully obtained Environment Clearance of 750KLPD along with CO GEN Power Plant for the proposed project activity i.e Grain Based distilleries for Ethanol Blended Petrol. The Company has also signed and executed a Long Term Ofitake Agreement for setting up of upcoming Standalone dedicated ethanol plants of 500 KLPD and 250 KLPD at Chhindwara, Borgaon, Madhya Pradesh and Goalpara, Assam respectively in ethanol deficit states for supply of Indigenous Denatured Anhydrous Ethanol to Oil Marketing Companies (OMCs) under ‘Ethanol Blending Petroleum Program? to meet ethanol requirements for 20 % blending by year 2023 by using corn/maize and rice combination, for supply of quantity of 12.87 Crores Litres per annum for 10 years.

By FY25, the Company plans Company is on track of Setting up of largest single stream grain based plant in ASIA. to expand its ethanol capacity to 810 KLPD from current 60 KLPD. In view of the above Company has acquired land and ordered for major Plant and Machineries. Company is looking at a total capex of 45,000 Lakhs over the next 12 months, out of which 30,000 Lakhs will be required to set up the 500 KLPD Ethanol plant in the state of Madhya Pradesh and 15,000 Lakhs will be required for expanding the aggregate capacities across the grain processing division. The planned Capex for this project is ~ 15,000 Lakhs, out of which the company has deployed ~ 6,000 Lakhs already towards upgradation of the power plant and existing capabilities. The company expects ~ 20% increase in total combined capacities of the plants. The upgraded capacities will be utilized towards the production of Sorbitol 70% Solution and Starch Derivatives like Dextrose Monohydrate & Maltodextrin Powder. Further, an estimated capex of 18,500 Lakhs is to be deployed for ethanol plant in Assam over next 24 months. The Capex is financing through a loan of 17,000 Lakhs from HSBC Bank for the Ethanol facility in Madhya Pradesh, proceeds of the Qualified Institutions Placement and internal accruals.

The decision of advancing 20% blending target by 2023 has created huge opportunities in the ethanol sector. Ethanol plants based on Starchy feedstock are going to drive the new capacities. As we go forward some further favorable developments are likely in form of flex fuel policy, ethanol blending in diesel, expansion of biofuels basket and feedstock differentiated pricing for ethanol.

Notwithstanding the external challenging environment, your company remains cautiously optimistic about the outlook based on the preparedness to deliver future ready offerings across the value chain, strong momentum for climate actions solution and diversified market portfolio in addition to resilient home market.

Your Company for the purpose of expanding the current business of the Company and exploring the business opportunities globally has incorporated a wholly owned subsidiary of the Company in International Free Zone Authority (IFZA), Dubai Silicon Oasis, Dubai, United Arab Emirates. However, no capital is infused yet.

Your Company has always strived towards nation building, through its business endeavors which focuses on creating excellent environment. We aim at emerging stronger, once situations normalize. The emphasis will be on continued incubation of future businesses and create value for our stakeholders in the long term.


In any business, risks and prospects are inseparable. The Company is exposed to various risks which may be internal as well as external. The Company has a comprehensive risk management system in place and is tailored to the specific requirements of its diversified businesses, taking into consideration various factors, such as the size and nature of the inherent risks and the regulatory environment of the individual business segment of operating company. The risk management system enables it to recognize and analyze risks early and to take timely appropriate action. The Senior Management of the Company regularly reviews the risk management processes of the Company.

Therefore, the Company?s diversified product profile, quality approach, value-added segments, manufacturing flexibility, modern technology & strong marketing network has saddled the company to successfully counter the effect of such adversities.

Company has formed Risk Management Committee and policy thereon to cater and mitigate various risks after necessary identification and evaluation.

We believe that our multi-location operations also allow us to leverage the competitive advantages of each location to enhance our competitiveness and reduce geographic and political risks in our businesses.

The Management, being well acquainted with business risks, is saddled to take care of the risks and concerns and takes appropriate and timely measures as and when the need arises.

Also, taking into cognizance of the current major risk is to control fixed and variable costs related to raw materials, crude oil, energy, coal, fuel, lime stone, etc. and mitigation measures, required to be taken thereon. The performance, future prospects and cash flow generation could be materially impacted by any of these risks or opportunities. As a responsible management, the Company?s principal endeavor is to maximize returns. The Company continues to take all steps necessary to minimize its expenses through detailed studies and interaction with experts. Further, there are constant review meeting at management level to discuss and analyze various near term and long-term risk and formulate plans to mitigate the same.

Cost Risks

Risk: The key raw material consumed by the Company has been very volatile and sudden change can have an adverse impact on the Company?s operating margins.

Concern: The Company has many long-term contracts with its major customer where the raw material cost could not be passed through entirely.

Financial risks

Risk: Financial risks relates to the Company?s ability to meet its financial obligations and lessen the impact of various factors like interest rates, foreign currency exchange rates, credit rating etc. It also includes any risk to servicing pension obligations and to financial ratios due to impairment.

Concern: Company is well positioned to service financial risk and facilitates its growth objectives. The Company has adequate measures to deal with all types of financial risks.

Legal and Compliance risks

Risk: Legal and compliance risks relate to risks arising from outcome of legal proceedings, government action, regulatory action, which could result in additional costs.

Concern: Company has ensured compliance of all laws applicable to the Company and effectively monitors through efficient compliance management system.

Strategic Risks

Risk: It includes the range of external events and trends (like Government policy) that can adversely impact the Company?s strategic growth trajectory and destroy stakeholder value. It also includes the risks arising out of the choices the Company has made in defining its strategy. Concern: Company has ensured mitigation and took prevention measures to the extent and wherever possible.


The Company?s internal financial control framework is commensurate with the size and operations of the business and is in line with requirements of the regulations. Internal control systems have been a core focus for the Company. The Company has laid down procedures and policies to guide the operations of the business. The Company has a strong internal control system comprising various levels of authorization, supervision, checks and balances and procedures through documented policy guidelines and manuals. Effective/ adequate internal control systems are in place to ensure that all assets are safeguarded and protected against unauthorized use and the transactions are authorized, recorded and reported correctly. Such controls which are subjected to periodical review also ensure efficiency of operations, accuracy and promptness of financial reporting and compliance with all applicable laws and regulation. The Company?s internal control systems are routinely tested by the Management, Statutory Auditors and Internal Auditors.

The Internal Audit Team regularly monitors the efficacy of internal controls/and compliances with Standard Operating Procedures and Manuals with an objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance that all transactions are authorized, recorded and reported correctly and follow policies and statutes.

The management exercises their control over business processes through operational systems. These processes are reviewed and updated on regular basis to improve their efficacy and meet the business needs.


A regular Internal Audit System is also in place. The Company has an independent Internal Audit function with an established risk management framework. Outside expertise is availed to supplement internal resources. The internal audit approach is based on random sample selection and takes into consideration the generally accepted business practices. The internal audit reports are discussed by the Audit Committee of the Board of Directors along with the directions/ action plan. The directions are implemented by the respective departments.

The Internal Audit Team also assesses opportunities for improvement in business processes, systems and controls, gives recommendations and reviews the implementation of directions issued by the management, Board of Directors or its Committees.


Following are the financials highlights of the Company for the year ended March 31, 2022 on a comparable consolidated basis.

Particulars 2021-22 2020-21
Revenue from operations 1,10,072.64 76,603.44
Profit before Interest, Tax & Depreciation (EBITDA) 15,216.52 13,304.14
Profit/(Loss) before tax for the year 11,479.65 9,367.82
Profit/(Loss) after tax for the year 8,524.89 6,211.66


As per the latest amendment as introduced by SEBI in SEBI (Listing Obligations & Disclosure Requirement) (Amendment) Regulations, 2018 on May 09, 2018 effective from April 01, 2019, new sub-clause (i) has been inserted in Clause I in Part B of Schedule V of SEBI (Listing Obligations & Disclosure Requirement), Regulations, 2015 according to which the listed entity shall provide the 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 the detailed explanations thereof, including:

Particulars 2021-22 2020-21 % Comments
Current Ratio 2.08 2.34 -11.32 Rs.
Debt Equity Ratio 0.17 - - Rs.
Debt Service Coverage Ratio 27.71 16.58 67.16 DSC ratio is higher as compared to last year due to increase in Revenue from operation resulting into higher EBIT and reduction in Interest cost due to lower borrowings.
Return on Equity Ratio 0.13 0.12 6.01 Rs.
Inventory Turnover Ratio 9.21 6.99 31.81 Ratio is improved due to better Inventory management resulting in to higher revenue from operation
Trade Receivables Turnover Ratio 10.10 8.48 19.14 Rs.
Trade Payables Turnover Ratio 10.05 8.73 15.11 Rs.
Operating Profit Margin 0.11 0.13 -16.86
Net Capital Turnover Ratio 1.68 1.51 10.99 Rs.
Net Profit Ratio 0.08 0.08 -4.49 Rs.
Return on Capital Employed 0.17 0.20 -14.52 Rs.
Return on Investment 0.09 0.10 -5.47 Rs.


Caring for its people has always been the way of life in the Company as its people are always treated as most valuable assets. Your Company has been continuously working to improve human resources skills, competencies and capabilities in the Company, which is critical to achieve results as per our strategic business ambitions. The Company has been successful in fostering a people-centric cohesive culture within the organization that has been instrumental in creating its diverse pool of intellectual capital. The Company is focused and committed towards empowering its employees and continues to embark upon several initiatives on this front.

The Company has a team of experienced and qualified personnel to support its plant and other allied operations. The team is having technical expertise and experience, which is critical for successful or timely implementation of operational decisions.

The recruitment of well qualified personnel and retention of experienced workforce is critical for maintaining the talent pool in the Company. The Company continuously works towards ensuring that appropriate recruitment and retention plans are in place to avoid any gaps in talent pool.

Employees are also empowered to take full ownership and accountability of their responsibilities. Besides human resource development, Company provides various welfare measures for its employees and their families. Cordial industrial relations in factory have also helped Company to build a strong team of employees at various levels having good experience and skills.

The underlying rule of Company?s policy towards human resource development is that competent and motivated manpower is the most important factor in achieving business goals. The policies in this regard are evolved and pursued to achieve this objective. Industrial relations remained cordial at all locations during the year. No working hours was lost due to any labour dispute.

Simultaneously, we continue to strengthen employee?s value proposition including health and wellness measures, re-skilling programs, appropriate compensation interventions, ESOPs and enhanced career growth opportunities. Our recent priority has been to vaccinate our employees with agility and we have been holding various booster vaccination drives at our plants across the country, towards this endeavor.

As at the financial year ended March 31, 2022, there were total 458 numbers of employees and workers on roll of the Company.


Certain Statements in the Management Discussion and analysis Report section concerning future prospects may be forward looking statements which involve a number of identified/non identified risks, uncertainties and assumptions that could cause actual results to differ materially. In addition to the foregoing changes in the macro-environment, geopolitical tensions as a result of war, global inflation, global pandemic COVID-19 may pose an unforeseen, unprecedented, unascertainable and constantly evolving risk, inter alia to the Company and the environment to which it operates. The result of these identified/ non identified risks, uncertainties and assumptions are made on available internal and external information and are the basis for determining certain facts and figures stated in the report. Since the factors underlying these assumptions are subject to change over time, the estimates on which they are based are also subject to change accordingly. These forward looking statements represent only company?s current intentions, beliefs, expectations, and any forward looking statements speaks only as of the date on which it was made.

These risks and uncertainties include the effect of economic and political risks within and outside India, volatility in interest rates, change in Government or regulatory policies that may impact the Company?s business as well as its ability to implement the strategy. The Company does not undertake to update these statements.


The Company has followed the guidelines of accounting standards as mandated by the Central Government in preparation of its financial statements.

For and on behalf of the Board of Directors
Dr. Chandra Kumar Jain
Delhi , August 9, 2022 Chairman and Managing Director
DIN: 00062221