Global economic overview
The global economy was estimated to have grown at a slower rate of 3.2% in 2022,
compared to 6% in 2021 (which was on a smaller base of 2020 on account of the pandemic
effect). The relatively slow global growth of 2022 was marked by the Russian invasion of
Ukraine, unprecedented inflation, pandemic-induced slowdown in China, higher interest
rates, global liquidity squeeze and quantitative tightening by the US Federal Reserve.
The challenges of 2022 translated into moderated spending, disrupted trade and
increased energy costs. Global inflation was 8.8% in 2022, among the highest in decades.
US consumer prices increased about 6.5% in 2022, the highest in four decades. The Federal
Reserve raised its benchmark interest rate to its highest in 15 years.
| Regional growth (%) |
2022 |
2021 |
| World output |
3.2 |
6.1 |
| Advanced economies |
2.5 |
5.0 |
| Emerging and developing economies |
3.8 |
6.3 |
Performance of major economies:
United States: Reported GDP growth of 2.1% in 2022 compared to 5.9% in 2021. China: GDP
growth is expected to contract from 8% in 2021 to 3% in 2022. United Kingdom: GDP is
expected to grow 4.1% in 2022 compared to 7.6% in 2021. Japan: Reported growth of 1.7% in
2022 compared to 1.6% in 2021. Germany: Reported GDP growth of 1.8 % in 2022 compared to
2.6% in 2021.
[Source: PWC report, EY report, IMF data, OECD data]
Indian economic overview
Even as the global conflict remained geographically distant from India, ripples
comprised increased oil import bills, inflation, cautious government and a sluggish equity
market. India reported an economic growth of 7.2% in FY 2022-23. India emerged as the
second fastest-growing G20 economy in FY 2022-23. India overtook UK to become the
fifth-largest global economy.
Growth of the Indian economy,
| FY 2022-23 |
Q1 |
Q2 |
Q3 |
Q4 |
| Real GDP Growth (%) |
13.1 |
6.3 |
4.4 |
6.1 |
(Source: Budget FY24; Economy Projections, RBI projections)
After three consecutive years of rise, Indias foreign exchange reserves declined by
around $ 70 billion in 2022 coupled with rising inflation and interest rates. The
countrys forex reserves, which stood at $606.47 billion on April 1, 2022, declined to
$578.44 billion on March 31, 2023. Indias currency weakened from Rs. 75.91 to a US dollar
to Rs. 82.34 as on March 31, 2023 due to a stronger dollar and weaker current account
deficit.
There were positive features of the Indian economy during the year under review as
under
Per capita income almost doubled in nine years to Rs 172,000 during the year under
review, a rise of 15.8 percent over the previous year. India moved up in the Ease of Doing
Business (EoDB) rankings from 100th in 2017 to 63rd in 2022.
Outlook: India is expected to grow 6.8% in FY2024, catalysed in no small measure by 35%
capital expenditure growth by the government. The growth could also be driven by
broad-based credit expansion, better capacity utilisation and improving trade deficit.
Union Budget FY 2023-24 provisions:
An outlay of Rs. 1.97 lakh crore was announced for Production Linked Incentive schemes
across 13 sectors.
Industry Structure and developments
Industry drivers
Growing demand for healthier lifestyle and eating habits are driving the demand for
nutritious and quality food. Packaging standards: Improvement in the packaging quality has
extended the shelf life of products, enhancing convenience. Ready to eat food: Millennials
and Gen Z now account for approximately 1.8 billion people, or more than 23% of the global
population. The ready-to-eat meals market is expanding as a result of busier lifestyles,
rising incomes, an increase in nuclear families and an absence of cooking skills. (Source:
punemirror.com) Food safety: Increasing health awareness among consumers and a rising
adoption of vegetarian and vegan lifestyles, particularly in developed regions, have led
to a growing demand for organic foods and non-GMO ingredients (grains, seeds and fruit).
Healthy diet: Consumers increasingly seeking foods that are driving traction for clean and
sustainable food products. Working women: The proportion of employable women has increased
from 41.25% in 2021 to 53.28% presently. It is anticipated to remain steady at 52.80% in
2023.
(Source: fortuneindia.com, yourstory.com)
Company overview
The Company is exploring various options to undertake production and trading activities
in the food industry.
Currently, the management is evaluating the possibilities of restructuring the business
and corporate structure involving the Company with the Companies operating in the similar
segment namely Ruparel Foods Private Limited and/or Ruparel Food Specialties Private
Limited. This exercise is being contemplated in order to enable better management focus
and control of the business, reduce the number of operating companies, achieve a reduction
in overheads, administrative, and other expenditures.
Discussion on financial performance with respect to operational performance.
During the year under review, since the Company is yet to start operational activities,
it has incurred the total expenditure of Rs. 19.43 lacs towards administrative expense
with no revenues in the current year. Hence, the Company has incurred the total loss of
Rs. 19.43 lacs.
Opportunities and Threats
Opportunities:
Since the Company is yet to commence business operations it is looking out for various
opportunities where it can explore and take the benefits of consumer base, vendors and
suppliers and ensure low costing of the products to be manufactured without compromising
over the quality of the products.
Also, as stated above the Company is evaluating the possibilities of restructuring the
business and corporate structure involving the Company with the Companies operating in the
similar segment. This exercise is being contemplated in order to enable better management
focus and control of the business, reduce the number of operating companies, achieve a
reduction in overheads, administrative, and other expenditures.
Threats:
The Company oversees the threats in the operations, which can arise due to excessive
increase in shipping freight rates, shortage of shipping containers, lack of liquidity,
since overall cashflows are affected aftermath of the pandemic COVID-19, the
Russia-Ukraine conflict which also led to global upheaval etc.
Risks and Concern
The Company is taking all such steps to generate revenues and is in the process to
commence its operations. The Company has in place its Risk Management Policy to avoid
events, situations and circumstances which may lead to negative consequences on the
Companys business. Currently, there are no elements of risk, which in the opinion of the
Board may at present threaten the existence of the Company.
The Company is having a systems-based approach to Business Risk Management, and it has
identified process of risk management which includes prioritization of risks, selection of
appropriate mitigation strategies and periodic reviews of the process of management of
risks.
Risk Management framework of the Company shall primarily focus on following elements:
A) Risk to Company Assets and Property It will be ensured that there is proper security
and maintenance of assets and adequate coverage of insurance to facilitate replacement of
assets with minimal disruption to operations. The roles and responsibilities of the
departments will be identified to ensure adequate physical security and maintenance of
their assets.
B) Employees Related Risks - Employees constitute the most important assets of the
Company. The Human Resources Policies have been evolved over the years with the object of
mitigating employee related risks including reducing attrition rate. Adequate legal
safeguards shall be provided to protect confidential information and protect the Company
from any probable contractual liability on account of misconduct/errors/omissions of
employees.
C) Foreign Currency Risks - The Company may have revenues and expenditure of the
Company once it is fully operational which include earnings and expenditure in foreign
exchange. Foreign currency risk management ensures that the treasury department
continuously tracks movement of foreign currencies, avails of services of experts, and
hedges the risk through appropriate mechanisms.
D) Risks associated with Noncompliance of Statutory enactments - The Company is a legal
entity incorporated under the provisions of the Companies Act, 1956. Its shares are listed
on the BSE
Limited. The Company is required to ensure compliance of provisions of various
applicable statutory enactments. The Company ensures that qualified professionals shall be
employed to comply with various applicable laws. In addition to the statutory audits, the
Company also undertakes internal audit/s at different levels periodically to ensure timely
check on the statutory compliances.
E) Competition Risks - Risk of competition is inherent to all business activities. The
sector in which the Company will carry its business operations; there will always have an
inherent risk of changes in the industry. To remain competitive, the Companys strategy in
this regard is to continuously keep upgrading its quality of raw material used, designs,
size and shapes of the products, and technology, innovating and building up a sustainable
team of skilled professionals. This would ensure that the Company has an edge over
competition in the market.
F) Operational Risks - The Company shall constantly work to limit the operational risks
that run through all facets of operations. This requires the combined efforts of all
business and support units, and the tools required continue to be developed. Apparent
trends shall analyzed, and various operating groups combine into task forces to address
these. The use of technology shall harnessed for more control. The company also ensures
that contracts shall properly drafted and adequate indemnity clauses are incorporated in
the contracts entered into with one or more parties.
Internal control systems & adequacy
The Company is in the process of designing the internal control system in order to
provide the Board of Directors a reasonable assurance that the companys assets are
safeguarded, the transactions are authorized and properly recorded, and that material
errors and irregularities are either prevented or would be detected within a specified
period of time.
Currently, the Internal Audits are periodically conducted by a firm of Chartered
Accountant who monitor and evaluate the efficiency and adequacy of internal control
systems in the Company and accordingly the management will ensure that adequate systems
for internal control commensurate with the Companys size and are in place.
Material developments in Human Resources / Industrial Relations front, including number
of people employed.
At present there is only one employee looking after accounting related work in the
Company apart from Directors and Key Managerial Personnel. Once the operations are
commenced, the Company will appoint more employees and will provide conducive workplace,
marked by knowledge accretion, teamwork and career growth.
Segment wise or product wise performance and outlook
As stated above, the Company is yet to initiate operations and hence the said clauses
are not applicable for the year under review.
RATIOS
| Sr. No. Name of ratio |
F.Y. 2022-23 |
F.Y. 2021-22 |
| (I) Debtors Turnover |
There is no sales or debtor hence |
There is no sales or debtor hence |
|
NIL |
NIL |
| (II) Inventory Turnover |
There is no inventory or Turnover |
There is no inventory or Turnover |
|
hence NIL |
hence NIL |
(III) Interest Coverage Ratio |
There is no interest expenditure hence NIL |
There is no interest expenditure hence NIL |
| (IV) Current Ratio |
19.85 % |
15.94 % |
|
(322.16 / 16.23) |
(347.26 / 21.78) |
| (V) Debt Equity Ratio |
There is no outside debt hence |
There is no outside debt hence NIL |
|
NIL |
|
(VI) Operating Profit Margin (%) |
There is no sale / operating profit hence NIL |
There is no sale / operating profit hence NIL |
| (VII) Net Profit Margin (%) |
There is no sale / net profit hence |
There is no sale / net profit hence |
|
NIL |
NIL |
(VIII) Details of any change in return on net worth as compared to the
immediately previous financial year along with a detailed explanation thereof |
There is no profit hence NIL |
There is no profit hence NIL |
Cautionary statement
Statements in this Management Discussion and Analysis describing the Companys
objectives, expectations or predictions may be forward looking within the meaning of
applicable laws and regulations.
This report contains forward-looking statements, identified by words like, ‘will,
‘expected and so on. All statements that address expectations or projections about
the future, but not limited to the Companys strategy for growth, product development,
market position, expenditures and financial results, are forward-looking statements. Since
these are based on certain assumptions and expectations of future events, we do not
guarantee that these are accurate or will be realised.
Our actual results, performance or achievements could thus differ from those projected
in any forward-looking statements. We assume no responsibility to publicly amend, modify
or revise any such statements on the basis of subsequent developments, information or
events.
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