Financial Performance
This year also Company could not start its business activities due to financial and
other factors beyond the control of management of the Company. The financial year 2022-23
closed at a net profit of Rs. 6.43.69/- (amount in Lakhs) as compared to net profit of Rs.
162.11/- (amount in Lakh) in the preceding financial year.
Industry Structure and development:-
India, a potential market for industrial explosives and its accessories, has witnessed
a radical shift from complete import dependence in the past decades to self sufficiency
with an exportable surplus presently. The explosives industry in India is robust with an
exportable surplus. Rising construction activities and significant growth of the mining
industry is expected to further boost the demand for various materials such as coal,
electricity and cement. This in turn will lead to an increase in the consumption of
explosives.
Industry Prospect and Outlook
Global industrial explosives industry Industrial explosives are used in blasting that
arc typically employed in mining and construction. Explosives in mining have the biggest
market share and may be found in coal mining, quarrying, non-metal mining, and metal
mining. The market is witnessing growth, due to the rising demand for blasting materials
from the mining and construction industry. Increasing population and rapid urbanization
are ensuring significant opportunities for ongoing and upcoming Industrial and commercial
projects, which need explosives for various purposes. With inflation on a declining path
ongoing and upcoming Industrial and commercial projects, which need explosives for various
purposes. It is expected to drive the Industrial Explosives market substantially during
the forecast period. With a CAGR of 5.4%. the global industrial explosives industry is
expected to grow to more than US$ 16 billion, between 2023 and 2028.
Indian Explosives Industry
Below are the growth drivers for the Indian explosives industry and where IGIL is
involved -:
Roads and infrastructure sector:-
India has the second-largest road network in the world at about 62.16 lakh km. The
Nations pride, the visionary project of Atal Tunnel that runs under the Rohtang Pass
which was constructed on the Manali - Leh Highway under the challenging conditions of
freezing temperatures in extremely difficult terrain, has officially been certified by the
World Book of Records, as the "Worlds Longest Highway Tunnel above 10,000 Feet.
Outlook -
Outlook The budget for FY 2023-24 has signalled a renewed focus on infrastructure and
housing, with a significant increase in the outlay for Roads and Highways. The allocation
for this sector has been raised from H 1.99.000 crorc to H 2.70.000 crorc. indicating a
strong commitment to the development of National Highways in the country. This increased
investment is set to give a substantial boost to the National Highway Construction Sector.
In FY 2022-23. the National Highway construction fell short of its target of 12.000 KM due
to land acquisition issues. However, the Ministry plans to construct 14.000 KM of highways
in FY 2023-24. Hie development of rural roads under the Gram Sadak Yojana will also
receive significant attention in the coming year.
Mining:-
The mining sector in India is one of the countrys most important. Many key businesses
rely on it for essential raw materials. India has 1,531 active mines and produces 95
minerals, including four fuels, ten metallic, twenty-three nonmetallic, three atomic, and
55 minor minerals (including building and other materials). Based on the countrys
geological mapping, an area of 571,000 square kilometres (out of a total of 3.1 million
square kilometres) has been designated as an Obvious Geological Potential (OGP) area,
where the geological potential for the occurrence of mineral deposits is greater. Minerals
such as manganese, lead, copper, and alumina are predicted to expand by double digits in
the next few years. There is significant scope for new mining capacities in iron ore,
bauxite, and coal. Since major reforms in the Mining Policy from 2021, 108 Mineral Blocks
other than Coal have been auctioned. India is the Worlds second largest Coal producer and
Fifth largest in Country in terms of Coal deposit. Indias target is 1.2 Billion Tons Coal
Production by FY 2024-25. Countrys Coal Production has increased considerably from 646
Million Tons in 2014 to 893 Million Tons in FY 2022-23. Coal India the Worlds largest
Coal producer produced 703.22 Million Tons in F-23 registering an increase 12.94% over
previous year. The other public sector coal company Singareni Collieries registering an
all time high production of 67.14 Million Tons registering an increase of 3.26. The major
growth have been in the private and captive mines which produced 122.38 Million Tons
registering a massive growth of 35.14%. This substantial growth has considerably increased
the availability of Coal to the Power Sector. Despite this increase, the countrys coal
imports have also risen, highlighting the need for continued efforts to reduce dependence
on foreign coal.
Outlook -
Outlook To achieve the governments aim of eliminating the need for steam coal imports,
there is a renewed focus on increasing production from Coal India and private sector
mines. The Coal Ministry has set a target of 1017 Million Tons for the year 2023-24 and
the target set for Coal India is 780 Million Tons, Singareni Collieries 75 Million Tons
and Private & Captive Mines is 162 Million Tons. Coal India has planned a Capital
expenditure of H 16,500 crore for the year F-24 and accelerating rail connectivity for
major mines under PM Gati Shakti. The Coal Ministry is also undertaking 52 First Mile
Connectivity projects for Coal India, Singareni Collieries, and Ncyvcli. Additionally, 133
blocks will be up for auction in the 6th and 7th Tranche of Commercial bids, with 15
blocks planned for MDOs. All of these initiatives demonstrate the countrys determined
efforts to meet the rising demand for power by increasing coal production. Coal Indias
capital expenditure for the year is also significant, reflecting the governments
commitment to the industrys growth. Overall, the coal industry is poised for growth, and
with continued support, it will play a vital role in powering the nations progress.
Segment wise or Product wise performance
The Company has been carrying out business activity during the year under review.
However, the companys primary business is manufacture of ‘explosives as a single
business segment. The company has achieved a turnover of Rs. 2095.93/- during the year
under review.
Opportunities and Threats
Opportunities:
The Governments thrust on indigenous defence manufacturing under the "Make in
India" initiative and the proposed amendments in the Defence Procurement Policy 2016
demonstrate rising opportunity for the Companys growth.
Increase in coal demand The countrys energy needs will rise in the future as a result
of urbanisation and economic growth. In the foreseeable future, coal would continue to be
the
dominant source for supplying Indias expanding electricity needs, despite rising
investments in renewable capacity.
Government schemes - The governments focus on "Make in India" to establish
"Atmanirbhar Bharat" is expected to decrease import dependency and raise
domestic demand for Indias defence industry. The government further aims to support MSMEs
in the defence export sector through favourable policies and initiatives. The government
liberalised and authorised FDI under automatic route up to 74% and through government
route up to 100% where it is likely to lead an access to modern technology.
Infrastructure investments The governments Gati Shakti master plan for multimodal
connectivity is expected provide major impetus to the infrastructure sector. A capital
outlay of H 10 lakh crore has been allocated by the government in Union Budget 2023-24 for
infrastructure development which would boost the economic growth and aid the industry 18.
The development of Smart Cities is also likely to increase investments in infrastructure
Shrinking global economies provide opportunity for new competitive player to enter into
the market.
Threats:
At this point, there arent any significant risks to the long-term viability of IGILs
business. Driven by robust financials good operational efficiencies, and improved
intellectual capital capabilities, IGIL is well positioned to keep providing value to
stakeholders. However, supply chain constraints and geopolitical ambiguity are important
dangers that could result in short-term economic difficulties.
Risk and Concerns
Risk is an integral part of the business process. To enhance the risk management
process, the company has mapped the risks. Risk arises for achieving business objectives
are identified and prioritized. Risk mitigation activity plans are established and
executed as and when need arises. Periodical reviews are carried out to assess the risk
levels. The Board at IGIL continues to be in charge of risk management and internal
control, with a focus on defining the companys risk appetite, regularly assessing and
monitoring key risks, and reviewing reports generated by internal auditors on internal
controls and risk reports
Internal Control System and their Adequacy
The Company has in place an adequate internal control system to safeguard all assets
and ensure operational excellence. The system also meticulously records all transaction
details and ensures regulatory compliance. The Company has an Audit Committee in place
which guides and provides proper measure for controlling the affairs of the Company.
Human Resource
Your company has 97 employees as on 31st March, 2023. Relations between the management
and employees have been cordial. Your company maintains a work environment that is free
from any harassment.
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