MANAGEMENTS DISCUSSION AND ANALYSIS
Economic Overview FY 2023-24
For the entire fiscal 2023-24, The Indian economy grew over 7% for the third consecutive year, driven by stable consumption and improving investment demand. India is seeing its economic activity gaining momentum amid continuing global uncertainties. The focus will be on bottom-up reforms, job and skill creation, MSME development, green transition, and addressing inequality.
PRINTING INDUSTRY
Print is still respected by advertisers, and the medium continues to deliver returns. As long as this continues, print has nothing to worry. The industry faces grim challenges. The first is the growing disinterest of youngsters in delivering newspapers early in the morning. The second is the movement away from two- newspaper homes. Readers are shedding the second newspaper because of easy availability of net-based information.
Print media cannot ignore the digital challenge. It must reinvent itself to stay relevant. Its greatest asset today is trust and credibility. The printed word is trusted more than the digital word both by readers and advertisers.
COMPANY
The Company strived hard to increase its sales/turnover including exploring various national/international markets. The Company has immense engineering capability. The Company is in discussion with various global manufacturers for their component and/or machine manufacturing related to printing industry.
Operations during the year 2023-24 were stable. The rising raw material cost and high ERE (labour cost) lead to higher running costs.
The Company recorded total revenue from operations of Rs. 6575.82 Lakhs as compared to Rs. 7957.39 Lakhs in the previous financial year. The EBIDTA for the financial year ended March 31, 2024 is Rs. (1640.00) Lakhs as compared to Rs. (1387.84) Lakhs in the previous financial year ended March 3l, 2023. During the year, the Company incurred net loss (total comprehensive income, net of taxes) of Rs. 1943.22 Lakhs as compared to loss of Rs. 1048.86 Lakhs in the previous year (after exceptional item for Rs. 699.95 Lakhs).
Opportunities
In digital media, articles can be hidden away and authenticities of news are always questionable. Further, there are chances that smaller news is overlooked by readers. Also, irregular networks affect readers mindset. A print newspaper is everlasting and unchanging. The reach of print newspaper covers remote cities, towns and villages.
With rising literacy and regionalization of the newspapers offers different opportunities, the Company foresees subtle growth in print industry. Technology continues to be the prime focus for your company.
Increase in literacy rates across the country has created an interest amongst the young and old alike to stay up to date with the current affairs of the country and the globe. Unlike some other markets with more developed digital ecosystems, the newspaper revenue streams in the nation have not faced serious challenges from the digital innovations. Nonetheless, senior citizens prefer to keep it old school when it comes to getting their daily entertainment and information which is likely to keep the ink in the print sector flowing.
Threats
With higher costs of papers including levy of import duty and consumables, government initiatives of digitalization and environment friendly measures, the production of newspapers over the years will foresee a deep cut. Lower advertising revenue due to switch in digital media also add to mounting losses of printers.
However, expansion in market size and regionalization of printing is partly compensating this negative trend.
Outlook
The limitations of physical circulation of newspaper during this pandemic have also forced many newspaper printing houses to look for other popular and convenient options of digital media with more focus on e- papers, apps and online subscription.
However, with growing literacy rate and availability of newspapers in many regional languages, the print industry may survive this tide, albeit at a low rate.
Risk and concerns
High costs of production, geographical concentration and competition risk are few of the major concerns for the Company. The Company has taken various measures which help the Company to outline the principal risks and uncertainties and then take appropriate actions that could avert operating and financial performance.
Normal foreseeable risks of the Companys assets are adequately covered by comprehensive insurance. Risk assessments, inspections and safety audits are carried out periodically.
Internal Control System
Adequate Internal Control System helps to prevent and detect frauds & errors, safeguarding of assets and accuracy and completeness of accounting records.
The Companys well-structured internal control systems which are subjected to regular assessment for its effectiveness, reinforces integrity of Management and fairness in dealing with the Companys stakeholders.
Your company has appointed an Independent Internal Audit teams for conducting regular internal audits of the systems and procedures of financial reporting and operations of the Company. The Audit Committee periodically reviews the Internal Audit Reports, scopes and plans, significant findings and corrective actions, if any.
The Statutory Auditors have conducted a review of Internal Financial Control as required under the Companies (Auditors Report) Order, 2016 and have found the same to be very effective.
Key Financial Ratios:
In accordance with SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the details of significant changes (change of 25% or more as compared to the immediately previous financial year) are given below:
| Sr. no. | Ratios/Measure | As At March 31, 2024 | As At March 31, 2023 | Variation | Reason for variance for change more than 25% |
| a) | Current ratio | 1.06 | 1.43 | -26% | There has been reduction in current assets which is mainly attributable to reduction in trade receivables and inventories. |
| b) | Debt-Equity ratio | 0.22 | 0.11 | 110% | The company made borrowings during the year, which increased its total debt. Additionally, losses incurred in fiscal year 2023-24 led to a decrease in total equity. Consequently, the debt-to-equity ratio increased. |
| c) | Debt Service Coverage Ratio | (8.20) | (5.56) | 47% | As compared to previous year 2022-23, the earning available for debt service is reduced during current year i.e. 2023-24. As a result, increased losses have led to an adverse change in the debt service coverage ratio (DSCR). |
| d) | Return on equity % | (0.22) | (0.11) | 100% | Losses have nearly doubled in the current year i.e. 2023-24 compared to the previous year i.e. 2022-23, leading to a 100% variation/reduction in the return on equity (ROE) ratio. |
| e) | Inventory turnover ratio | 0.93 | 1.03 | -10% | Not Applicable |
| f) | Trade receivables turnover ratio | 34.79 | 44.54 | -22% | Not Applicable |
| g) | Trade payables turnover ratio | 1.65 | 4.41 | -63% | Purchases made by company during the current year i.e. 2023-24 are almost half of those in previous year i.e. 2022-23, resulted |
| in variation in the trade payable turnover ratio. | |||||
| h) | Net capital turnover ratio | 5.27 | 3.10 | 70% | The entitys sales and working capital both declined during the financial year 2023-24 compared to the previous year 2022-23. Despite this, the entity achieved proportionately higher sales relative to the current level of working capital, leading to an increase in the net working capital turnover ratio. |
| i) | Net profit % | (3.31) | (7.04) | -53% | Sales of the company have decreased, while losses have increased in the current year compared to the previous year. However, the proportionate decline in sales is smaller than the rise in losses, and other expenses have also increased, resulting in a significant drop in the net profit ratio. |
| j) | Return on capital employed % | (0.17) | (0.13) | -24% | Not Applicable |
| k) | Return on investment | (0.11) | (0.09) | 22% | Not Applicable |
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