integra garments textiles ltd Management discussions

Your Board of Directors is pleased to share the present Management Discussion and Analysis Report based on the business of the company i.e. FMCG Business, Textile Business, Infrastructure Business and Energy Business, and the business performance under each of its strategic pillars along with the Financial Statements for the financial year ended March 31, 2022.

CURRENT/CONVENTIONAL BUSINESS:

Your Company is in the business of manufacturing, trading and dealing in garments and textiles, ventured into dealing, trading of agricultural commodities, life necessities, items of basic human needs, organic and natural products and processed foods etc. and other essential goods, infrastructural products among others. Our Company now strives to be the ultimate one-stop- shop for all life essentials goods be it Roti, ‘Kapda or ‘Makan. On the ideology of Roti, Kapda or Makan your company has recently ventured into four business segments namely agro products, clothing, infrastructure, and energy.

A. FMCG-Agro Products Business:

Global Industry Overview:

The global economy enters 2022 in a weaker position than previously expected. As the new Omicron COVID-19 variant spreads, countries have re imposed mobility restrictions. Rising energy prices and supply disruptions have resulted in higher and more broad-based inflation than anticipated, notably in the United States and many emerging market and developing economies. The ongoing retrenchment of Chinas real estate sector and slower-than-expected recovery of private consumption also have limited growth prospects.

Global growth is expected to moderate from 5.9 in 2021 to 4.4 percent in 2022-half a percentage point lower for 2022 than in the October World Economic Outlook (WEO), largely reflecting forecast markdowns in the two largest economies. A revised assumption removing the Build Back Better fiscal policy package from the baseline, earlier withdrawal of monetary accommodation, and continued supply shortages produced a downward 1.2 percentage-points revision for the United States. In China, pandemic-induced disruptions related to the zero-tolerance COVID-19 policy and protracted financial stress among property developers have induced a 0.8 percentage-point downgrade. Global growth is expected to slow to 3.8 percent in2023. Although this is 0.2 percentage point higher than in the previous forecast, the upgrade largely reflects a mechanical pickup after current drags on growth dissipate in the second half of 2022. The forecast is conditional on adverse health outcomes declining to low levels in most countries by end-2022, assuming vaccination rates improve worldwide and therapies become more effective.

The global FMCG market is projected to reach $15,361.8 billion by 2025, registering a CAGR of 5.4% from 2018 to 2025. Fast moving consumer goods (FMCG) also known as consumer packaged goods are products that can be bought at a low cost. These products are consumed on a small scale and are generally available in a variety of outlets including grocery store, supermarket, and warehouses. The FMCG market has experienced healthy growth over the last decade because of adoption of experience retailing along with reflecting consumers desire to enhance their physical shopping experience with a social or leisure experience.

The global FMCG market is segmented based on product type, distribution channel, and region. Based on product type it is classified as food and beverages, personal care (skincare, cosmetics, hair care, others), healthcare care (over-the- counter drugs, vitamins & dietary supplements, oral care, feminine care, others), and home care. The distribution channel segment comprises of supermarkets and hypermarkets, grocery stores, specialty stores, specialty stores, e commerce and others. By region, it is analyzed through North America, Europe, Asia-Pacific, and LAMEA.

In 2018, the food & beverage segment held majority share in the FMCG market and is expected to hold a significant share in the global market throughout the forecast period. Consumers today have become more knowledgeable and open to food & beverages consumed by foreign cultures.

This search for novel experience has pushed the food & beverage operators to maintain the quality of their offerings. The trend of healthy eating has also been a top impacting factor affecting the growth of the food & beverage market.

Indian Industry Overview:

Fast-moving consumer goods (FMCG) sector is Indias fourth-largest sector with household and personal care accounting for 50% of FMCG sales in India. Growing awareness, easier access and changing lifestyles have been the key growth drivers for the sector. The urban segment (accounts for a revenue share of around 55%) is the largest contributor to the overall revenue generated by the FMCG sector in India. However, in the last few years, the FMCG market has grown at a faster pace in rural India compared to urban India. Semi-urban and rural segments are growing at a rapid pace and FMCG products account for 50% of the total rural spending.

The FMCG market in India is expected to increase at a CAGR of 14.9% to reach US$ 220 billion by 2025, from US$ 110 billion in 2020. The Indian FMCG industry grew by 16% in CY21 a 9-year high, despite nationwide lockdowns, supported by consumption-led growth and value expansion from higher product prices, particularly for staples. The rural market registered an increase of 14.6% in the same quarter and metro markets recorded positive growth after two quarters. Final consumption expenditure increased at a CAGR of 5.2% during 2015-20. According to Fitch Solutions, real household spending is projected to increase 9.1% YoY in 2021, after contracting >9.3% in 2020 due to economic impact of the pandemic.

Companies with dedicated websites recorded an 88% YoY rise in consumer demand in 2020. Since then, more businesses have begun to adopt the D2C model, and India is now home to >800 D2C brands looking at a US$ 101 billion opportunity by 2025.

Key Market Movements:

• The Government has allowed 100% Foreign Direct Investment (FDI) in food processing and single-brand retail and 51% in multi-brand retail. This would bolster employment, supply chain and high visibility for FMCG brands across organised retail markets thereby bolstering consumer spending and encouraging more product launches. The sector witnessed healthy FDI inflows of US$ 20.01 billion from April 2000-December 2021.

• In November 2021, Flipkart signed an MoU with the Ministry of Rural Development of the Government of India (MoRD) for their ambitious Deendayal Antyodaya Yojana - National Rural Livelihood Mission (DAY-NRLM) programme to empower local businesses and self-help groups (SHGs) by bringing them into the e-commerce fold.

• The Government of India has approved 100% FDI in the cash and carry segment and in single-brand retail along with 51% FDI in multi-brand retail.

• Rural consumption has increased, led by a combination of increasing income and higher aspiration levels. There is an increased demand for branded products in rural India.

• India has a large base of young consumers who form majority of the workforce, and due to time constraints, barely get time for cooking.

• The number of internet users in India is likely to reach 1 billion by 2025. It is estimated that 40% of all FMCG consumption in India will be made online by 2020. The online FMCG market is forecast to reach US$ 45 billion in 2020 from US$ 20 billion in 2017.

• The minimum capitalisation for foreign FMCG companies to invest in India is US$ 100 million.

• FMCG market is expected reach US$ 220 billion by 2025.

B. Textile Business:

Global Industry Overview:

The global textile market size was valued at USD 993.6 billion in 2021 and is anticipated to grow at a compound annual growth rate (CAGR) of 4.0% from 2022 to 2030. Increasing demand for apparel from the fashion industry coupled with the growth of e-commerce platforms is expected to drive the market growth over the forecast period.

The global textile industry impacts nearly every human being on the planet. The global textile industry is a manufacturing sector thats currently worth nearly three trillion dollars (in U.S. dollars) and includes the production, refinement, and sale of both synthetic and natural fibers used in thousands of industries.

Its estimated anywhere between 20 million and 60 million people are employed in the textile industry worldwide. Employment in the garment industry is particularly important in developing economies such as India, Pakistan, and Vietnam. The industry accounts for approximately two percent of global gross domestic product (GDP) and accounts for an even greater portion of GDP for the worlds leading producers and exporters of textiles and garments.

The fashion application segment led the market and accounted for more than 73% of the global revenue share in 2021 owing to the increased consumer spending on clothing and apparel. In addition, high consumer demand for crease-free suiting & shirting fabrics, as well as quality-dyed & printed fabrics across the globe will drive the segment growth further.

Moreover, the growing population and rapid urbanization in the emerging economies, such as India, Bangladesh, Vietnam, and Brazil, are likely to boost the demand for clothing and apparel, thereby positively contributing to the segment growth.

In addition, increasing application in the construction, transportation, medical, and protective clothing applications have boosted the use of the same, which is consequently driving the textiles market. The use of textiles in different areas of a household is one of the prominent growth driving factors for the household application segment.

The textile industry works on three major principles, designing, production, and distribution of different flexible materials, such as yarn and clothing. Several processes, such as knitting, crocheting, weaving, and others, are largely used to manufacture a wide range of finished and semi-finished goods in bedding, clothing, apparel, medical, and other accessories.

The segment will expand further at a steady CAGR from 2022 to 2030 due to the increasing environmental concerns coupled with the consumer shift toward sustainable products, which will drive the demand for natural fibers.

The polyester segment is expected to witness a significant growth rate from 2022 to 2030, which can be attributed to the rising demand for polyesters due to different properties, such as high strength, chemical & wrinkle resistance, and quick-drying properties.

Increasing demand for online shopping is expected to drive the textile manufacturing market. Manufacturers can now sell their products on a larger platform than before, which will increase their customer base geographically driving the growth of the textile manufacturing market. In countries such as India, for instance, e-commerce portals have boosted the sales of traditional garments by giving larger exposure to producers who were confined to one geography.

Indian Industry Overview:

• Indias textiles industry has a capacity to produce a wide variety of products suitable for different market segments, both within India and across the world.

• India is the third-largest textile manufacturing industry and is responsible for more than 6% of the total textile production, globally. The rapid industrialization in the developed and developing countries and the evolving technology are helping the textile industry to have modern installations which are capable of high-efficient fabric production.

• The Indian textiles market is expected to be worth more than US$ 209 billion by 2029.

• India is the worlds largest producer of cotton. Production stood at 360.13 lakh bales for the crop year October 2021-September 2022. Domestic consumption for the 2021-22 crop year is estimated to be at 335 lakh bales.

• Production of fibre in India reached 2.40 MT in FY21 (till January 2021), while that for yarn, the production stood at 4,762 million kgs during same period.

• For instance, in India, 100 percent Foreign Direct Investments (FDI) is allowed in textiles, which is set to focus on positive market growth.

• In addition, the consumption of textile fibers, such as synthetic and cellulose fibers, needed for filtration in industrial applications is expected to have a positive impact on the regional market growth.

• In Feb 2021, The Indian Government has announced the setting up of seven mega textile parks in the next three years. The government has also decided to rationalize the duties on raw material inputs to manmade textiles by reducing the customs duty rate on caprolactam, nylon chips, and nylon fiber and yarn to 5 %.

• In Feb 2021, Paraguays Ministry of Industry and Commerce announced that it will be investing USD 1.1 million in the manufacturing sector, mainly benefiting the clothing, textiles, and footwear industries, among other areas related to assembly operations.

Key Market Movements:

• The market has been witnessing rapid growth due to growing expansion and mergers & acquisitions activities.

• The companies are trying to increase their sales through various government trade agreements along with partnerships with e-commerce portals, such as Amazon, Flipkart, e-Bay, and others.

• The market is fragmented due to the presence of several small- and medium-scale manufacturers, especially in countries, such as China and India.

• Moreover, the easy availability of low-cost labor coupled with the government support to establish various big players business units in the aforementioned countries is expected to add positive growth to the market.

• Increasing Demand for Natural Fibers: These fibers are widely used to manufacture garments, apparel, construction materials, medical dressings, and interiors of automobiles, among others. The abundance of natural fibers, especially cotton, in China, India, and the United States, is contributing significantly to the growth of the global textile market. The increasing consumption of natural fibers, such as cotton, silk, wool, and jute, will drive the global textile market during the forecast period.

• Shifting Focus Toward Non-woven Fabrics: The increasing birth rate and aging population has contributed to the growing demand for hygiene products, such as baby diapers, sanitary napkins, and adult incontinence products, which, in turn, is expected to fuel the demand for non-woven fabrics.

• The automobile industry manufactures a large number of exterior and interior parts using non-woven fabrics owing to their durability. Rapid industrialization and recent innovations in the field of textile technology are other factors fueling demand for non-woven fabrics, globally.

Figure: Non- woven Fabric export share by the regions; Source: www.mordorintelliaence.com

• The future of the Indian textiles industry looks promising, buoyed by strong domestic consumption as well as export demand. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with the entry of several international players.

• Indian government has come up with several export promotion policies for the textiles sector. It has also allowed 100% FDI in the sector under the automatic route. The Rs. 10,683 crore (US$ 1.44 billion) PLI scheme is expected to be a major booster for the textile manufacturers. The scheme proposes to incentivize man-made fiber apparel.

C. INFRA PRODUCT BUSINESS:

Global Industry Review:

• The Global Infrastructure Market was valued at USD 2,242.3 Billion in 2021 and is expected to reach USD 3,267.3 BIllion by 2027, registering a growth rate of 6.48% during the forecast period.

• The global steel rebar market size was valued at USD 219.2 billion in 2019 and is expected to grow at a CAGR of 7.2% from 2020 to 2025. The expansion of construction sector is anticipated to remain a key driver for market growth. Growing construction output, especially in emerging countries, such as China, Brazil, and India, and diversification program in the Middle East countries, are contributing to the demand for steel rebar.

Figure: Global Steel bar market by application; Source: www.grandviewresearch.com

• Major GDP contribution in the Middle Eastern countries comes from the oil & gas sector. However, countries in the region are focusing on the development of non-oil & gas sectors such as residential construction and infrastructure. For instance, the Saudi Arabian government, under its Saudi Arabia Vision Plan 2030, revealed an infrastructure investment plan worth USD 450 billion to reduce its dependency on the oil & gas sector for a more effective government, to diversify its economy, and build a robust society.

• For food grade piping system the global HDPE pipes market was valued at $17,907 million in 2017 and is projected to reach $26,518 million by 2025, growing at a CAGR of 5% from 2018 to 2025.

Indian Industry Overview:

• India is expected to become the worlds third largest construction market by 2022

• India is home to fifth-highest reserves of iron ore in the world.

• India will require investment worth Rs. 50 trillion (US$ 777.73 billion) across infrastructure by 2022 for a sustainable development in the country.

• Infrastructure sector is a key driver for the Indian economy. The sector is highly responsible for propelling Indias overall development and enjoys intense focus from Government for initiating policies that would ensure time- bound creation of world class infrastructure in the country. Infrastructure sector includes power, bridges, dams, roads, and urban infrastructure development.

• For Infrastructure business steel fittings and steel bars are very important tools for the growth in this segment.

• In FY22 (till January), the production of crude steel and finished steel stood a 98.39 MT and 92.82 MT, respectively. According to CARE Ratings, crude steel production is expected to reach 112-114 MT (million tonnes), an increase of 8-9% YoY in FY22.

• As of September 2021, India was the worlds second-largest producer of crude steel, with an output of 9.5 MT.

Key Market Movements:

• The Infrastructure in India is estimated to grow at a CAGR of approximately 7% during the forecast period.

• During the fiscals 2020 to 2025, sectors such as Energy (24%), Roads (19%), Urban (16%), and Railways (13%) amount to around 70% of the projected capital expenditure in infrastructure in India.

• Increase in Road Infrastructure followed by the development of highways would be undertaken, including the development of 2,500 km access control highways, 9,000 km of economic corridors, 2,000 km of coastal and land port roads, and 2,000 km of strategic highways

• The infrastructure sector has become the biggest focus area for the Government of India. India plans to spend US$ 1.4 trillion on infrastructure during 2019-23 to have a sustainable development of the country. The Government has suggested investment of Rs. 5,000,000 crore (US$ 750 billion) for railways infrastructure from 2018-30.

D. ENERGY BUSINESS: (Materials, Products and Services for the Renewable Energy Equipment and Projects)

Global Industry Review:

• The global renewable energy market was valued at $881.7billion in 2020, and is projected to reach $1,977.6 billion by 2030, growing at a CAGR of 8.4% from 2021 to 2030. Renewable energy, even referred as clean energy, is usually derived from natural sources that are constantly replenished.

• Renewable energy collectively provides around 7% of the worlds energy demand. Renewable energy is relatively more expensive than fossil fuel. Several factors are responsible to drive the usage of renewable energies, the most crucial being the attribution of global warming due to carbon dioxide (CO2) emission from the combustion of fossil fuels.

• The renewable energy market analysis is done on the basis of type, end-use, and region. On the basis of type, the market is categorized into hydroelectric power, wind power, bioenergy, solar energy, and geothermal energy. The end-user covered in the study includes residential, commercial, industrial, and others. Region wise, the market is studied across North America, Europe, Asia-Pacific, and LAMEA.

• The residential and industrial sectors are expected to consume more energy during the forecast period in Asia- Pacific. Furthermore, India has significant growth potential; however, due to its inconsistent policy and business environment in past, the renewable energy share in total energy production was less. There has been an increase in investments in renewable energy projects in India, owing to which it is one of the countries experiencing rapid growth in the Asia-Pacific market.

By end use, the residential segment acquired the top position of the global market in 2020, and it is anticipated to grow at a CAGR of 8.4% during the forecast period. Increase in use of geothermal heat pump in residential heating application is expected to drive the growth of the market.

The requirement of geothermal power is expected to increase significantly with rise in demand for electricity. This factor is expected to drive the growth of the market. Several companies in the market offer geothermal power to the residential sectors.

Indian Industry Overview:

• The Government is committed to increased use of clean energy sources and is already undertaking various large- scale sustainable power projects and promoting green energy heavily. In addition, renewable energy has the potential to create many employment opportunities at all levels, especially in rural areas. Indias renewable energy sector is expected to attract investment worth US$ 80 billion in the next four years. About 5,000 compressed biogas plants will be set up across India by 2023.

• The Indian renewable energy sector is the fourth most attractive renewable energy market in the world. India was ranked fourth in wind power, fifth in solar power and fourth in renewable power installed capacity, as of 2020.

• As India looks to meet its energy demand on its own, which is expected to reach 15,820 TWh by 2040, renewable energy is set to play an important role.

• Installed renewable power generation capacity has gained pace over the past few years, posting a CAGR of 17.33% between FY16-20. With the increased support of Government and improved economics, the sector has become attractive from an investors perspective.

• The government plans to establish renewable energy capacity of 523 GW (including 73 GW from Hydro) by 2030.

• Solar power installed capacity has increased by more than 18 times from 2.63 GW in March 2014 to 49.3 GW in at the end of 2021. In FY22, till December 2021, India has added 7.4GW of solar power capacity, up 335% from 1.73 GW in the previous year. Off-grid solar power is growing at a fast pace in India, with sales of 329,000 off-grid solar products in the first half of 2021.

• With a potential capacity of 363 GW and with policies focused on the renewable energy sector, Northern India is expected to become the hub for renewable energy in India.

Key Market Movements:

• According to the data released by Department for Promotion of Industry and Internal Trade (DPIIT), FDI inflow in the Indian non-conventional energy sector stood at US$ 11.21 billion between April 2000-December 2021.

• More than Rs. 5.2 lakh crore (US$ 70 billion) has been invested in Indias renewable energy sector since 2014. According to the analytics firm British Business Energy, India ranked 3rd globally in terms of its renewable energy investments and plans in 2020.

• In October 2021, Reliance New Energy Solar Ltd. (RNESL) announced two acquisitions to build more capabilities. Both acquisitions - REC Solar Holdings AS (REC Group), a Norway-based firm, and Sterling & Wilson Solar, based in India - exceeded US$ 1 billion and are expected to contribute to Reliances target of achieving the capacity of 100 GW of solar energy at Jamnagar by 2030.

• The NTPC is expected to commission Indias largest floating solar power plant in Ramagundam, Telangana by May-June 2022. The expected total installed capacity is 447MW.

• In the Union Budget 2022-23, the allocation for the Solar Energy Corporation of India (SECI), which is currently responsible for the development of the entire renewable energy sector, stood at Rs. 1,000 crores (US$ 132 million).

• In April 2021, the Central Electricity Authority (CEA) and CEEWs Centre for Energy Finance (CEEW-CEF) jointly launched the India Renewables Dashboard that provides detailed operational information on renewable energy (RE) projects in India.

• In 2022, Indias renewable energy sector is expected to boom with a likely investment of US$ 15 billion this year, as the government focuses on electric vehicles, green hydrogen, and manufacturing of solar equipment.

• It is expected that by 2040, around 49% of the total electricity will be generated by renewable energy as more efficient batteries will be used to store electricity, which will further cut the solar energy cost by 66% as compared to the current cost. Use of renewables in place of coal will save India Rs. 54,000 crore (US$ 8.43 billion) annually.

COMPANY OVERVIEW:

Your Company was incorporated as "Five Star Mercantile Private Limited" on August 6, 2007, as a private limited Company under the Companies Act, 1956 and was granted the Certificate of Incorporation by the Registrar of Companies, Mumbai. Subsequently, our Company was converted into a public limited company and the name of your Company was changed to "Five Star Mercantile Limited" on January 3, 2012, and a fresh Certificate of Incorporation was issued by the Registrar of Companies, Mumbai. Subsequently, your Company, Five Star Mercantile Private Limited entered into a Composite Scheme of Arrangement and Amalgamation with the division of Morarjee Textiles Limited called the Integra Division and Morarjee Holdings Private Limited.

This Composite Scheme of Arrangement and Amalgamation was approved by the Honble Bombay High Court vide its order dated June 29, 2012. Consequently, the name of your Company was changed to "Integra Garments and Textiles Limited" and a fresh Certificate of Incorporation was issued on August 2, 2012, by the Registrar of Companies, Mumbai.

Pursuant to this amalgamation, the main object of your Company shifted to carry on the business of manufacturing, along with trading, dealing, importing, exporting, and selling textiles and fabrics. Your Company dealt with mens, womens and childrens clothing and wearing apparel garments and dresses of every kind, nature and description as per the market trends.

On July 14, 2021, your Company was acquired by Mr. Vishesh Gupta upon completion of the open offer, and pursuant to the Share Purchase Agreement dated March 31, 2021 and the management of our Company underwent a change. Our Company with effect from August 7, 2021, appointed and composed a new Board of Directors and Key Managerial Personnel. After the change in the management and control of our Company, the objects were broadened.

The present objects of your Company comprises of manufacturing, trading and dealing in garments and textiles, ventured into dealing, trading of agricultural commodities, life necessities, items of basic human needs, organic and natural products and processed foods and other essential goods, Energy and infrastructural products among others. Accordingly, the name of our Company was changed to "Integra Essentia Limited" on February 16, 2022, and a fresh Certificate of Incorporation was issued by the Registrar of Companies, Mumbai.

Integra Essentia Limited is a Delhi based company engaged in business of Life Essentials i.e. Food (Agro Products), Clothing (Textiles and Garments), Infrastructure (Materials and Services for Construction and Infrastructure Development) and Energy (Materials, Products and Services for the Renewable Energy Equipment and Projects) and many more Products and Services required sustaining the modern life. The company is promoted and managed by a core team of experts of diverse experience relevant to the company businesses.

Current Business Segments

Our business is divided into different major segments which include Food (Agro Products), Clothing (Textiles and Garments), Infrastructure (Materials and Services for Construction and Infrastructure Development) and Energy (Materials, Products and Services for the Renewable Energy Equipment and Projects).

Agro Product Business Division:

Your Company deals in trading of agro products comprising of certified organic agro products and general agro products such as rice, wheat, flour, grains, pulses, tea, coffee, sugar, dry fruits, spices, vegetables, exotic and general fruits and a variety of other products of the same nature such as juices and nectars, organic herbs, essences, agro nutraceuticals and dairy products.

Clothing Business Division:

Your Company deals in the clothing and textile segment comprising of clothing and furnishing fabrics, linen material. Our product portfolio in this segment consists of bed linen, table linen for domestic use, hotels and hospitals supplies, upholstery materials, curtains & curtain fabrics, carpets and rugs and apparels for men, women, and children.

Infrastructure Business Division:

Your Company is engaged in the business of trading of materials for construction and infrastructure development such as steel products comprising of TMT bars, girders, and hollow sections; construction materials comprising of cement, bricks, tiles, mortar, bitumen; pipes & plumbing systems; electrical conduits, switches, circuit breakers etc; irrigation pipes and sprinkler systems, drip irrigation systems and hybrid irrigation systems, borewell pumps etc; and rainwater harvesting systems.

Energy Business:

Your Company offer materials, products and services for renewable energy equipment and projects such as solar power generators, hydrogen cell power generators, and batteries for solar & hydrogen cell power generators.

Opportunities for sustainable growth:

• Your Company intends to evaluate the possibilities of exports and commence exports our products in the near future. This will supplement our total market and improve margins thereby helping us improve our profitability and return on capital employed.

• Your Company intends to take on a lease of about 2000 acres of land at different locations for producing certified Organic Agro Products for further expansion.

• Your Company intends to launch and establish our retail presence in the Agro Products segment throughout the country in order to tap into the market widely market.

• Your Company intend to focus on expanding our customer base and forming new long-term relationships with customers by catering to their needs and demands in a timely, efficient and cost-effective manner.

• Increased opportunities through "Make in India" initiative by the Central Government.

• Wider audience and global use of the FMCG products and fast growth of the industry

• The Company is optimistic to exploit the opportunities available in the markets by harnessing its potential ad strengths.

• Continuing focus on organic growth

• Eyeing to create a meaningful presence outside of India

• Pursuing added value opportunities in various industries.

Financial Performance

The financials of the Company as on 31st March, 2022 in comparison with the previous year figures along with the key financial indicators are discussed as under:

Net worth

The Companys net worth viz. paid up share capital, general reserves and retained earnings stood at Rs. (29.10) Crore as against the previous year where it stood at Rs. (30.20) Crore.

Borrowings

The Companys borrowings aggregated to Rs. 28.72 Crore and unsecured borrowings in form of inter corporate loans/ advances and loans from related parties of Rs. 0.27 Crore in comparison to the previous year figures being 28.59 Crore.

The total debt-equity ratio of the Company as on 31^st March, 2022 was -1.58:1.

Trade Receivables & Trade Payables

Trade receivables at the end of financial year was Rs. 7.90 Crore and trade payables aggregated to Rs.14.26 Crore as against the previous year where Trade receivables and trade payables stood at 0.10 and 0.02 Crore respectively.

Current Assets & Current Liabilities

The Current Assets of the Company stood at Rs. 16.77 Crore whereas the current liabilities aggregated to Rs.45.96 Crore as against the previous year where the Current Assets and Current Liabilities were 0.06 Crore and 30.33 Crore respectively. The Current Ratio of the Company as at 31^st March, 2022 was 0.36:1.

During the fiscal 2022, Since company management has hanged, the company has diversified its business and stated its business operations during the financial year under audit, due to witch there are variations in the ratios from last financial year to current financial year.

Earnings per Share

The basic and diluted Earnings per Share (EPS) as at the end of financial year was 0.10.

Research & Development

The Company is well aware of the only improvisation and the product quality is the vital for the growth and sustainability of the Company for that company is continuously working on the research and development aspect of the sector.

R&D is one of the driving forces for expansion in the company. Research and development is one of our key strengths and is integral to our growth. Our in-depth expertise in process research, process development and analytical references enables us to provide integrated solutions to our global customers.

Environmental Health and Safety

We are subjected to extensive environmental law and regulations relating to the prevention and control for water and air pollution, environmental protection and hazardous waste management in relation to our manufacturing facility. We aim to comply applicable health and safety regulations and other requirements in our operation and comply with legislative requirements, requirements for our licenses, approvals, various certifications and ensuring the safety of our employees and the people working at our facility or under our management

Risks, Concerns, Internal Control Systems and their Adequacy

The major risk that concerns the Company is its business risk. The Company is subjected to a high business risk in terms of its high dependability on other Industries for demand of its products carrying the nature of raw materials. The Company has a risk management and mitigation plan. Periodic checks are carried out on all systems and processes as part of internal audit. The Companys internal control systems are commensurate with the natureof its business and the size and complexity of its operations. The Statutory Auditors also evaluate the efficacy and adequacy of internal control systems including controls with respect to the financial statements, its compliance with operating systems, accounting procedures and policies in the Company. Corrective actions are undertaken basis findings of audits.

Human Resources

The human resource function has been significant for our Company. It plays a pivotal role in the change of management and triggers the unlocking of human potential, which results in organization transformation and success. Our learning and development philosophy is to ensure that real learning takes place and endures. We believe that real learning takes place when a learner can develop a new skill, competency and behaviour and is able to internalize and apply consistently to relevant work-life situations. The Company has developed a system to reward adequately and recognize employee contribution towards its growth. A remuneration policy has also been developed and adopted by the Company which provides for appointment and remuneration of Directors, Key Managerial Personnel and Senior Management.

Disclaimer

Statements in the Management Discussions and Analysis describing the Companys objectives, projections, estimates, expectations are "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax, corporate and other applicable laws together with the other incidental factors.