Industry Structure and Developments
Dyestuff sector constitute one of the major components of chemical industry having
vital role in the growing Indian economy. The Indian Dyestuff Industry has transformed
from being import dependent to an export driven industry. Dyes and Pigment group
constitute one of the major components of chemical industry having vital role in the
growing Indian economy. The Company operates into single segment with products comprising
from Dyes and Dyes Intermediates which are colouring materials having its customer base in
several industries such as Textile, Plastic, Paper, Ink etc. It is also the second highest
export segment in chemical industry.
Opportunities and Performance
Dyes predominately find application in textiles with almost 80% of its production being
used by textile sector. The other end applications involves paper, adhesives, art
supplies, food and beverages, ceramics, construction, cosmetics, glass, paints, plastics
and soap. The textile industry is expected to provide a positive growth trajectory and
product demand in future due to several factors such as growing population, increasing
disposable income, and changing consumer trends. The growing demand for textile dyes for
various fibre types, such as cotton, polyester, and viscose, is expected to fuel the
growth of the textile dyes market. The industry is likely to see new dyeing technologies
coming into the market with the help of good technical expertise and R&D achievements.
The market is witnessing a high growth due to the growing use of textile dyes. Low-cost of
manufacturing in APAC countries and high demand for textile dyes in the region are driving
the global textile dyes market.
During Financial Year 2021-22 the Company achieved sales revenue of 146.20 lakhs as
compared to 123.20 lakhs in Financial Year 2020-21. During the year the sales of Dyes
was 80 MT as compared to 90 MT in previous year. At present the Company is not able to
achieve significant growth in revenues and operating profits due to its inability to
restart manufacturing activity.
Outlook and Strategy
The long-term growth prospects of the Indian economy being positive, the textile
industry is also expected to grow in view of growing population, increasing disposable
income, and changing consumer trends. The growing demand for textile dyes for various
fiber types, such as cotton, polyester, and viscose, is expected to fuel the growth of the
textile dyes market. With the consistent shift in the manufacturing base for Dyes and
Dye-intermediates from the western countries to the Asian countries, there will be more
opportunities for Dyes manufacturers. However, the Company may not be able to undertake
manufacturing operations in immediate future due to financial constraints and ongoing
litigation and disputes in labour matters.
Risks, Concerns and Threats
Stringent environmental regulations may hamper the growth of the dyes & pigment
industry. Most of the advanced countries are imposing new and more stringent ecological
norms which can restricts the exporters capability to grow, as complying with ecological
norms is too expensive. Also the regulations are having an adverse effect on the
availability of raw material and intermediate input products for the industry. The current
slowdown in Indian economy may persist for longer period affecting the overall growth.
Exchange-rate fluctuations, increase in prices of Crude Oil and down-stream
petrochemicals, etc are all areas of concern which your Company may face from time to
time.
Internal Control Systems and their adequacy
The Company has a proper and adequate internal control systems ensure there is
efficient use and protection of resources and compliance with policies, procedures and
statutory requirements. There are well-documented guidelines, procedures and processes,
integral to the overall governance, laws and regulations. An independent firm of chartered
accountants carries out the internal audit across the organization. The internal auditors
review the adequacy, integrity and reliability of control systems and suggest
improvements. The internal auditor conducts extensive reviews and process improvements
identified during the reviews, are communicated to the management on an on-going basis.
Significant observations made by the internal auditors and the follow up actions thereon
are reported periodically to the Audit Committee of the Board of Directors. The Audit
Committee monitors the implementation of the audit recommendations.
Discussion on Financial Performance with respect to Operational Performance
(Rs in Lakhs)
| Particulars |
FY 2021-22 |
FY 2020-21 |
| Net Sales |
146.20 |
123.20 |
| Earnings before Other Income, Interest, Depreciation and Tax (Operating Net Profit) |
(44.68) |
(50.62) |
| Earnings before Interest, Depreciation and Tax |
(17.23) |
(23.96) |
| Profit/(Loss) before Tax |
(114.50) |
(85.21) |
| Profit/(Loss) after Tax |
(114.52) |
(85.21) |
| Other Comprehensive Income/(Loss) |
(3.39) |
(3.59) |
| Total Comprehensive Income/(Loss) |
(117.91) |
(88.80) |
| Key Ratios |
|
|
| Debtors Turnover (Days) |
58.44 |
69.36 |
| Interest Coverage Ratio (Times) |
(3.26) |
(2.19) |
| Debt Equity Ratio (Times) |
(0.99) |
(1.01) |
| Current Ratio (Times) |
0.10 |
0.18 |
| Operating Profit Margin (%) |
(30.56) |
(41.09) |
| Return on Net Worth (%) |
(5.81) |
(4.59) |
The reasons for variation in key ratios are as under:
Operating Profit Margin: Due to decrease in other expenses.
Return on Net Worth: Due to increase in loss during the year.
Material Developments in Human Resources/ Industrial Relations Front
The Company believes that growth of the Company largely depends on the contribution and
efforts of the employees and understands the importance of the workforce. It always lays
an emphasis on creating an environment which is favorable for the employees. But as on
date the Company is facing ongoing litigation with workers of erstwhile Turbhe unit and
Patalganga unit at various Judiciary authorities and details of same are provided in
Boards Report. Company has only four employees on the pay roll as on 31st
March, 2022.
Cautionary Statement:
Certain statements made in this Report relating to the Companys outlook, estimates,
predictions etc. may constitute "forward looking statements" within the meaning
of applicable laws and regulations. Actual results may differ from such estimates, whether
express or implied. Several factors that could make a difference to Companys operations
include climatic conditions and economic conditions affecting demand and supply, changes
in Government regulation tax regimes, natural calamities, etc. over which the Company does
not have any direct control.
For and on behalf of the Board
Parag Sharadchandra Kothari
Chairman
DIN:00184852
Place: Mumbai
Date: 30,h May, 2022
+91-9892691696
