Kabsons Industri Management Discussions


Annexure - III

Industry structure and developments

The LPG market is expected to grow a CAGR of over 3.5% during the forecast period of 2022-2027. The LPG market is driven by the Domestic, Industrial, Automobile and Commercial business sectors in India. The increasing demand for LPG, on account of Government efforts to adopt the usage of clear fuels is expected to drive the market during the forecast period.

Further, the LPG Bottling Plants have been increasing in India for the past few years. Accordingly, to the PPAC Report, the LPG Bottling Plants reached a total of 202, with a steady rise in demand for LPG in the Country. According to a report, India is expected to overtake China, as the worlds largest LPG user for residential sector by 2030.

The LPG industry expansion in India, in recent years is particularly as a result of Government initiatives, the Countrys LPG coverage is increased to near 100% now from 61.9% in April, 2016.

Opportunities and Threats

Opportunities:

The Central Government may allow private Companies to sell subsidized LPG in India, a move which could potentially break the monopoly of the State-owned oil marketing Companies in the domestic cooking gas segment. Government has set up a 5 Member Committee on 30-05-2019 to review the existing frame work of LPG marketing and will also assess the need, if any to liberalize Government Policies to increase the participation of Private Sector in LPG marketing in the Country. However, there seems to be little or no progress on this matter.

Threats

The company does not foresee any major threat within the LPG industry. However, over the next 8 to 10 years the major threat is from the Piped Natural Gas network and Electrical Vehicles. However, with the complexities and investments involved to make PNG and EV a success, especially the lower disposable income, larger geographical bottlenecks of the country, the time frame may extend.

Management of Risks

Risk is an integral factor virtually in all types of businesses and have to be addressed and mitigated to minimize the risks. Risks are adequately identified, estimated and controlled by proper risk mitigations. There is considerable pressure to keep up the realization from the services in view of highly competitive market.

Outlook

Revenue of the company continues to come from servicing other large private players and leasing out the facilities including new factory shed at Aurangabad from April, 2023. All the Plants of our Company continue to be operational either by our own or third-party bottling or on leasing out except LPG Bottling Plant located at Jaipur. The company is making all efforts to improve the revenue from the coming yearsand also launching AEROSOL grade LPG supply in 33kg cylinders in our own brand name "KABSONS" and also 17kg cylinders with normal LPG for commercial and industrial use at Rohtak plant. LPG demand from the residential segment is expected to witness heavy increase. We expect the demand to rise from Auto LPG (as mobility increases), commercial and industrial consumption.

Internal financial control and its adequacy

The Board of your Company has laid down internal financial controls which comply with the provisions of the Companies Act, 2013 and Listing Regulations with Stock Exchange and that such internal -financial controls are adequate and operating effectively. Your Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

Discussion on financial performance with respect to operational performance.

During the year under review, the total income of the company stood at Rs.1,73,329.86 thousands for FY 2022-23 against Rs.1,19,648.76 thousands for FY 2021-22 and the profit after tax Rs.7,896.82Thousands for FY 2022-23 as against Rs.16,008.38Thousands for FY 2021-22. The total revenue and net profit of the company decreased by 50.67 % and increased by77.19% compared to the previous financial year respectively.

Material Developments in HRD and industrial Relations Front:

Your Directors recognize the value of employees as valuable assets. Developing, motivating, and retaining talented employees is a key responsibility and policy of your Companys management. The total no. of people employed by the company were 21at year end.

Cautionary Statement

Statements in the Management Discussion and Analysis describing the Companys estimates and expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.

Annexure - IV

Information pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

S. No. Name Designation Remuneration Paid For the year 2022-23. Remuneration Paid For the year 2021-22. Increase in Remuneration From Previous Year Ratio/times for median of Employee Remuneration
1. M Krishna Murthy Chief Financial Officer 23,46,000 20,91,900 2,54,100 12.92
2. Nagaraju Musinam Company Secretary cum Compliance officer 3,36,000 3,36,000 Nil Nil

a) Number of permanent employees on the roles of the company: 21 b) Comparison of remuneration of each Key Managerial Personnel against the performance of the Company: Company is having mainly income from Plant leases. Hence not comparable with the performance of the company.

For and on behalf of the Board of Directors of
Kabsons Industries Limited
Sd/-
Rajiv Kabra
Place : Hyderabad Managing Director
Date : 12.08.2023 DIN : 00038605