organic coatings ltd share price Management discussions

Industry Structure and Developments

The Financial year 2022-23 will go down in Indias economic history as an unprecedented one with huge fluctuations in fortune.

Ink industry is having great challenges and competition, more so from multinational companies. Raw material price also plays a major factor for competitive price offerings to the customers and thereby to capture the market share.

The Union Budget doubled down on the investment oriented strategy focusing on capital expenditure to kickstart a "virtuous cycle of investment" while crowding in private investments. The return of uncertainty clouded the global macro economic and financial landscape even as the global economy struggled to recover from the pandemic.

The Indian economy is estimated to have grown by 8.9% during the financial year aided by a favorable base but the economic recovery across the Sectors was uneven.

Opportunities and Threats

The newspaper and magazine circulations fall, advertising revenues are increasingly diverted from print to other channels, especially internet channels, facebook etc. These trends will result in a global decline in consumption of inks.

Company is visualizing facing major threat from Multinational Companies existing as well as new ones with their financial and technological strength.

Segment-wise or Product-wise Performance

The Company is mainly dealing with inks and its auxiliaries only.

Outlook, Risk and Concerns

Company should be able to improve the efficiency and effectiveness of all the operations at Vadodara Plant including improvement in labour productivity.

As the world economy is full of challenges and competition, Company is facing risks in terms of Strategy, Operations and Financial reporting and increasing compliances. Competition from multinational companies is a major factor to be looked into. Geo-political scenario like situation in China, Saudi Arabia, Iraq, Iran, Yemen and Afghanistan may change the landscape for Raw Material prices, Exports, etc. in the time to come. Change in tax laws more so about GST, interest rate structure, Government policies etc. may impact your companys business.

Internal Control systems and their Adequacy

The Internal Control system including of financial of the company is established to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition to ensure that transactions are authorized, recorded and reported correctly and that operations are conducted in an efficient and cost effective manner. Company has appointed an independent firm of Chartered Accountants to carry out the work of Internal Audit. Their reports are put and discussed in the Audit Committee regularly. Company is also taking guidance for constant improvement in the operations.

Discussion on Financial Performance with respect to Operational Performance

* PBDIT increased by 167.30 % to Rs.152.60 Lacs for the year ended 31st March, 2023 compared to previous year Rs. 57.08 Lacs.

* Total comprehensive (loss) decreased by 52.73% to Rs. (94.06) Lacs for the year ended 31st March, 2023 compared to previous year Rs. (198.99) Lacs.

* Revenue from operations (net) increased by 4.00 % to Rs. 2306.18 Lacs from Rs. 2217.56 Lacs in the previous year.

Material consumption has been decreased to 73.08 % as compared to 75.38% in the previous year.

Employee benefits expenses have been decreased to 3.75 % as compared to 3.85 % in the previous year.

Finance cost for the year increased to Rs. 149.37 Lacs from Rs. 146.80 Lacs in the previous year.

Depreciation charged at Rs. 98.27 Lacs as against Rs. 107.49 Lacs in the previous year.

Material Developments in human Resources / Industrial Relations front, including number of people employed

Due to impact of globalization, the role of Human Resource (HR) is having more relevance. There is shortage of talented and committed people across industries. Your Company is trying best within its own limitation to move further in this regard looking to its nature of operations and requirements. Management would like to thank all the existing as well as past employees for their valuable support in difficult economic conditions. The company has 50 permanent employees as on 31st March, 2023.

Cautionary Statement

The report contains forward looking statements that involve risks and uncertainties when used in this discussion, the words like plans, expects, anticipates, believes, intends, estimates or other similar expressions as they relate to company or its business are intended to identify such forward-looking statements. These statements are based on certain assumptions and expectations of future events. The companys actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements.