BULK LIQUID STORAGE SCENARIO
The Bulk Liquid storage and handling Industry in the private sector
acts as a dominant logistic partner in supply chain management framework for both -
Primary manufacturers and downstream units in various industries such as petrochemicals,
chemicals, synthetic fiber manufacturing, edible / non-edible vegetable oil refinery,
power generation, food processing, pharmaceuticals etc. It also caters to the needs of
traders of chemicals and edible/non-edible oils who import/export large parcels of these
liquids.
The Indian Chemical Industry has a dominant role as a manufacturer of
various chemicals for domestic consumption as well as for exports, particularly to the
European market where there are restrictions for manufacture of lot of chemicals on
safety, health and environment consideration.
This industry is further poised for growth on a regular basis with
emphasis on "Make in India" programme of the Govt. of India and increased demand
from domestic sector. The Port led modernisation planned for major ports in India would
well support the handling of increasing volumes on a year-on-year basis.
In the recent years domestic Oil Companies in the private sector have
been hiring storage tanks particularly at port locations. This has been necessitated for
the Private Oil Players in the Industry to optimize their logistics & transportation
costs of Petroleum products on PAN India basis. This trend is likely to continue and
volumes will increase on a regular basis as the Country has got surplus refineries and
therefore the imported crude & refined oil products need to be moved to all the
corners of the Country from the Port locations.
INDUSTRY STRUCTURE & DEVELOPMENT
Increasing urbanization and rise in per capita disposable income is
resulting in a strong growth outlook for several key end use industries. The pandemic has
also given opportunity to the Chemical Storage Terminals due to increased imports of raw
materials for the Pharma Industries. So, this is going to positively impact the growth of
Indian liquid bulk industry. Going ahead, liquid bulk trade volumes are set to grow at a
rapid pace. The Governments thrust towards domestic manufacturing is expected to
redefine the product flow patterns and to address the mismatch of production versus
domestic demand, the export volumes will also keep on increasing.
OPPORTUNITIES & THREATS
As earlier mentioned, the Central Government is taking a number of
progressive steps which would promote the growth of the Indian liquid bulk industry.
Increase in storage tank capacities at Kandla Port by various Terminal Operators have
reduced the utilization in general and have increased competition amongst the liquid
Terminal Operators. There is a consortium formed, named AVTL, aggregating terminals of
Aegis, Vopak & Friends with a total tankage of about 0.8 MMT in 240 tanks. Apart from
this, Aegis has 0.2 MMT storage at Mumbai. This gives them leverage to dominate the market
at Kandla.
The total thruput of the Kandla Terminals in the financial year 2022-23
was 0.54 MMTPA. The revenue in the financial year 2022-23 was 33.49 Cr. Inspite of the
threats, we could maintain the thruput i.e. utilisation. However, the revenue
dropped due to price competition.
Both the Terminal lands lease with DPT have expired and so
renewal of the leases are very crucial to keep the business continuity at Kandla for which
negotiations are going on. Kesar Multimodal Logistics Limited (KMLL) has got its
competitor in the form of CONCOR at Mandideep near Bhopal at a distance of 60 Km. We
require more export client to always make full rake movement to make the movement
profitable, which is being attempted. For the PFT segment, the Railway Goods shed at
Itarsi is operated by Railways which is located in the heart of the City. Besides, we need
to hire trucks from outside where the rate is high. This is not making us competitive.
The wholly owned subsidiary of the Company, KMLL has commenced
operation in 2016-17 after erecting the facilities of Phase I of the project and has shown
marked improvement in the year under review compared to previous years. We have further
increased our revenues during the year 2021-22. We have continued our ICD business and
also handled FCI rake loading business efficiently throughout the year. However, we could
not consolidate EXIM volumes due to huge scarcity of empty containers PAN India basis. We
expect to keep this momentum going and are confident of consolidating our turnover further
during next year.
PERFORMANCE
The Company as on date operates only in one segment i.e. bulk liquid
storage facility, the revenues of which for the current year stood at Rs 3,349.65 Lakhs as
against Rs 3,251.03 Lakhs of previous year showing a increase of 3.03%. The Total
Comprehensive Income for the year stood at Rs 425.63 Lakhs as against Rs (7,279.51) Lakhs
loss.
In KMLL the revenue for Cold Storage and Rail Side Container has gone
up by 38% and 43% respectively. However, the revenue for General Warehousing, Railway
Rake, ICD Direct billing gone down by 14%, 78% and 81% respectively. The total revenue
from FY 21-22 has been dropped in FY 22-23 from 10.02 Cr to 3.47 Cr.
RISKS AND CONCERNS
Every business is exposed to a certain amount of risk and concerns some
of which may be regulatory or change in policy pertaining to the business, economic
parameters, trade policy and geo-political factors, market risk, governmental clearances
and approvals, credit risk, which are difficult to foresee. Currently, the Company derives
its major share of revenue from its Bulk Liquid Terminals at Kandla, Gujarat.
Since, the Company is majorly dependent on these Terminals for its
revenues, it is exposed to specific risks that are particular to its business and
environment in which it operates. The Company manages these risks by following business
and risk mitigation practices. The Company has in place a Risk Management Policy.
INTERNAL CONTROL SYSTEM
The Company has an appropriate internal control system for its various
functions with the ultimate objective of improving the efficiency of operations, better
financial management and compliance with the applicable laws.
The Audit Committee reviews the adequacy and effectiveness of the
Companys internal control environment and monitors the implementation of audit
recommendations.
The Statutory Auditors have also examined the internal financial
controls of the Company and have submitted unmodified opinion on the adequacy and
operating effectiveness of the internal financial controls over financial reporting as at
31st March, 2023. The Company has appointed Independent Internal Auditor M/s. S
V Shah & Associates to carry out internal audit of its activities. The detailed
internal audit reports are discussed at Iength at various level and thereafter the said
reports are also placed before the Audit Committee for review and discussion on yearly
basis. No significant deficiency or material weakness in internal financial controls were
identified as part of the audit.
FINANCIAL PERFORMANCE
The information relating to the financial performance of the Company is
provided in the Directors Report.
MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT,
INCLUDING NUMBER OF PEOPLE EMPLOYED
The Company firmly believes that trained, talented and engaged
employees are the critical differentiators and provide competitive advantage for
sustaining and growing the business in the intensified spiral of global competition. As
such, the Company continues its focus on high performance, talent retention, employee
engagement and focused approach for smooth organizational workflow. The Company has a
total strength of 49 people as at 31st March, 2023.
KEY FINANCIAL RATIOS
PARTICULARS |
FY2022-23 |
FY 2021-22 |
Remarks |
| Debt Turnover Ratio |
9.81 |
10.03 |
There is no significant change |
| Inventory Turnover Ratio |
213.35 |
208.90 |
There is no significant change |
| Interest Coverage Ratio |
1.81 |
1.75 |
There is no significant change |
| Current Ratio |
0.54 |
0.65 |
There is no significant change |
| Debt-equity ratio |
0.00 |
(0.01) |
There is no significant change |
| Operating Profit Margin |
0.47 |
0.42 |
There is no significant change |
Net Profit ratio |
17.85% |
(194.69%) |
Due to provision made for
impairment of investments in and loans to subsidiary i.e. KMLL in previous year |
Return on investment |
0.04% |
0.22% |
Due to non booking of
notional Interest income on investments in and loan to subsidiary company and lower
investments in Mutual funds compared to previous year |
Return on Capital employed |
15.00 |
(65.98) |
Due to lower earnings and
other equity in previous year consequent to provision made for impairment of investments
in and loans to subsidiary. |
Return on net worth |
4.81% |
(86.43%) |
Due to lower earnings and
other equity in previous year consequent to provision made for impairment of investments
in and loans to subsidiary. |
Debt Service coverage ratio |
2.27 |
(11.73) |
Due to low EBITDA in previous
year consequent to provision made for impairment of investments in and loans to
subsidiary. |
Return on Equity Ratio |
0.05 |
(0.60) |
Due to low Net Income in
previous year consequent to provision made for impairment of investments in and loans to
subsidiary. |
| Trade receivables turnover ratio |
9.81 |
10.03 |
There is no significant change |
Trade payables turnover ratio |
7.92 |
4.11 |
Due to substantial payments
being made to Deendayal Port Trust during the current year. |
Net Capital Turnover ratio |
(3.59) |
(5.87) |
Due to decrease in current
assets consequent to transfer of Rs.800 Lakhs given to banks in previous year towards
advance for OTS proposal in respect of loans of subsidiary is adjusted in Loan accounts in
current year. |
FORWARD LOOKING STATEMENT
The above Management Discussion and Analysis Report contain
"forward looking statement" within the meaning of applicable laws, and
regulations and is futuristic in nature. All statements that address expectations or
projections about the future, including, but not limited to statements about the
Companys strategy for growth, market position, expenditures and financial results
are forward Iooking statements. The Companys actual results, performance or
achievement could thus differ materially from those projected in any such forward looking
statements. Investors are requested to make their own independent judgments before taking
any investment decisions and the Company assumes no responsibility.
For and on Behalf of the Board of Directors
For Kesar Terminals & Infrastructure Limited
|
Harsh Rajnikant Kilachand |
| Place: Mumbai |
Executive Chairman |
| Date: 29.05.2023 |
DIN: 00294835 |
+91-9892691696
