link pharma chem ltd share price Management discussions


INDUSTRY STRUCTURE AND DEVELOPMENTS:

The Company is engaged in the manufacturing and selling of drugs intermediates for Pharma Agriculture Industry.

OPPORTUNITIES AND THREATS:

Although we see a good demand in the chemical sector but increasing trend of crude has resulted in hike in solvent and other raw material price and therefore, cost of manufacturing has risen and also affected profitability of the Company.

PERFORMANCE:

The Companys current business activity has one primary reportable segment, namely Chemicals. The Companys sales in 2022-23 decreased to Rs. 3,875.78 Lacs from Rs. 5356.06 Lacs in 2021-22 in view of stiff market completion.

OUTLOOK:

As mentioned earlier due to increase in raw material costs, margins are affected. However, your company has been striving hard to develop new products which are in good demand in the market.

RISKS AND CONCERNS:

Though administrative and manufacturing costs have increased, your Company has been trying to adhere to the strict norms of compliance as stipulated by Gujarat Pollution Control Board (GPCB).

Due to process of manufacturing causing corrosion in plant which has been taken place due to nature of its manufactured products, the Company is required to spend certain amount to replace old machinery and equipment.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has in place, commensurate with the size and complexity of Companys business operation, effective internal control systems and policies for compliance of laws and to safeguard the interest of the Company. The internal audit is done by an independent firm of Chartered Accountants. Internal audits are regularly carried out to review the internal control systems. The internal audit reports along with recommendations contained therein are reviewed by the Audit Committee of the Board.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

The financial statements of the Company are prepared in accordance with the Indian Accounting Standards (referred to as ‘Ind AS) prescribed under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time. Significant accounting policies used in the preparation of the financial statements are disclosed in the notes to the consolidated financial statements.

The highlights of financial performance of the Company for the year under review are as under:

The Company has incurred revenue from operations of Rs. 3,875.78 Lacs as compared to net revenue of Rs. 5,356.06 Lacs in the previous year and PBT reduced to Rs. 88.63 Lacs as compared to Rs. 262.16 Lacs in the previous year and PAT reduced to Rs. 65.42 Lacs as compared to Rs. 188.17 Lacs in the previous year.

DEVELOPMENT IN HUMAN RESOURCE AND INDUSTRIAL RELATION:

The Company continues its focus on development of human resources. The Company is a firm believer that its employees are its strength and the Company therefore respects individual rights and dignity of all its employees. The relations of the management with employees during the year continued to be cordial. Learning and development has been strengthened to bring value addition in the employee and to enhance team building leading towards success. The Company focuses on providing the employees, employee - friendly environment and culture and career growth opportunities.

KEY FINANCIAL RATIOS:

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations thereof:

Financial Ratios 2022-23 2021-22 Variance
Trade Receivable Turnover Ratio 8.62 9.81 (12.00 %)
Trade Payables Turnover Ratio (e) 5.38 7.78 (31%)
Inventory Turnover (a), (d) 2.51 10.04 (75 %)
Current Ratio 1.21 1.28 (5.45%)
Debt Equity Ratio (c) 0.58 0.44 31.94%
Debt Service Coverage Ratio (a) 1.31 2.94 (55.53%)
Net Profit Margin (%) (a) 1.69% 3.51% (51.96%)
Net Capital turnover Ratio (a) 12.93 12.14 6.54%
Return on Capital Employed (a) 6.72% 14.09% (52.33%)
Return on Equity Ratio (a) 4.43% 13.92% (68.15%)
Return on Investment (b) (4.41%) 9.98% (144.16%)

(a) Due to Reduction in Revenue (b) Fluctuation in Borrowing (c) Increase in Borrowings (d) Increase in Inventory (e) Delays in payment to Trade Payable.

CAUTIONARY STATEMENT:

Statements in this report on describing the Companys objectives, expectations or predictions may be forward looking statements within the meaning of applicable security laws or regulations. These statements are based on certain assumptions and expectations of future events. Actual results could, however, differ materially from those expressed or implied. The Company assumes no responsibility in respect of forward-looking statements herein which may undergo changes in future on the basis of subsequent developments, information or events.

Annexure "B" to the Boards Report

PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is set out as under: (A) Conservation of Energy:

(i) the steps taken or impact on conservation of energy;

In boiler section, the waste heat energy is utilized in preheating water for boiler with efficient economizer.

Steam pipes insulations and outer aluminum claddings are checked on regular basis.

Control of exhaust fan by frequency control device and recycling of steam condensate to the boiler. In electricity consumption power factor is maintained within prescribed limit.

Shutting off unwanted office equipment, fans lights etc.

Power saver devices including LED bulbs are installed in place of conventional bulbs. (i) the steps taken by the company for utilizing alternate sources of energy; The Company is yet to take steps in this direction.

(ii) the capital investment on energy conservation equipment;

The Company has fitted dilute caustic scrubber in vent line of flue gases of boiler to scrub the free sulphur dioxide gas. The mist eliminator also there to save wet fumes to passing into chimney in line with the guideline given by the Gujarat Pollution Control Board consuming said fuel.

(B) Technology absorption:

1. The efforts made towards technology absorption The Company has not entered into any technology agreement or collaborations. However, efforts have been made to improve the quality of existing products by changing process in certain products.
2. The benefit derived like product improvement, cost reduction, product development, import substitution Quality has been improved of existing products to achieve more customer satisfaction and has resulted in earning better price as yield improvement is also observed.
3. In case of imported technology (imported during the last 3 years reckoned from the beginning of the financial year) The Company has not imported any technology during the last three years.
4. The expenditure incurred in research & development. Nil

(C) Foreign exchange earnings and Outgo:

1. Foreign Exchange Earned Nil
2. Foreign Exchange Outgo Nil

DISCLOSURE UNDER RULE 5 OF THE COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014.

1. Ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2022-23:

Sr.No. Name of Director Ratio
01. Mr. Satish G. Thakur – Chairman & Whole-time Director 17.10:1
02. Mr. Rishikesh Thakur – Managing Director 12.82:1

2. The Percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year 2022-23 compared to 2021-22:

Sr.No. Name of Director, CFO and CS % of increase
01. Mr. Satish G Thakur – Chairman & Whole-time Director NA
02. Mr. Rishikesh Thakur – Managing Director NA
03. Mr. Jayesh Jani – CFO NA
04. Mr. Bhushan Joshi – CS 9%
05. Ms. Khushbu Patel - CS NA

Note: Mr. Bhushan Joshi resigned as Company Secretary with effect from 17th September, 2022 and Ms. Khushbu Patel appointed as Company secretary with effect from 19th September, 2022.

3. The percentage increase in the median remuneration of employees in the financial year 2022-23 compared to 2021-22: 9%

4. The number of permanent employees on the roll of the Company: 31.03.2023 31.03.2022
83 86

5. Average percentile increase in salaries of employees other than managerial personnel: 10%

6. The Board of Directors of the Company affirms that the remuneration is as per the remuneration policy of the Company.

7. There is no employee covered pursuant to Section 197 read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Hence, no particulars are given.